TOKYO, Dec. 22 (Xinhua) -- Tokyo stocks edged lower Wednesday, with the key Nikkei stock index shedding 0.23 percent as investors opted to lock in gains following the market hitting a fresh seven- month intraday high and despite support from Wall Street, pessimism about Japan's economic outlook kept stocks moving in narrow range. Brokers said that despite a number of national holidays approaching as the year draws to a close and 2011 kicks off, the underlying sentiment of the market remains bullish despite some investors take a breather. But a pessimistic outlook for Japan's economy from the Cabinet Office coupled with a slower-than-expected rise in exports caused some investors to offload positions ahead of the new year, analysts said. Japan's exports rose 9.1 percent in November from a year earlier government data showed this morning before the start of trade, but the rise was slower than the median forecast for a 10.0 percent increase, following a 7.8 percent rise in October. Also giving some investors cause for concern was the government 's announcement in the afternoon that economic growth will slow 1. 5 percent in fiscal 2011 from 3.1 percent in the current year. Analysts said the Japanese economy will likely contract in the current quarter as the expiry of stimulus measures targeting environmentally-friendly vehicles has lessened domestic demand and demand for Japanese goods from the U.S. and China, Japan's biggest trading partners is also cooling off, economists also noted. However, the Cabinet Office predicts that as overseas economies pick up steam, Japan's will follow suit in the next fiscal year, provided there are rising demands for Japanese products. The government did note however that a strengthening yen or double-dip recessions in key global economies would hamper Japan's own economic growth. "Some investors were concerned about the government's economic outlook and their were some readjustments," said one local strategists. "But the readjustments were of little impact today," he said. The 225-issue Nikkei Stock Average lost 24.05 points from Tuesday to 10,346.48, after rising to 10,394.22 at one point, the highest intraday level since May 14, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 0. 43 point, or 0.05 percent, to close at 905.78. Japan's real estate and financial sectors performed well on Wednesday and Sumitomo Mitsui Financial Group advanced 0.6 percent to 2,911 yen and Mizuho Financial Group added 1.3 percent to 153 yen. Top-lender Mitsubishi UFJ Financial Group, meanwhile, climbed 1.1 percent to 443 yen. "The financial sector has lagged this year, hit mainly by Europe's debt problems. Trading by foreign investors is winding down before Christmas, but individual investors seem to be buying more actively than before," said Tsuyoshi Segawa, equity strategist at Mizuho Securities Co. "The focus will be on how individual investors move toward the end of the year and into next year, as their appetite for shares looks to be recovering, helped by an extension of tax breaks for stocks," Segawa added. Resources-related issues and trading houses added to gains as the price of crude futures rose above the key 90 U.S. dollar per barrel level and Mitsui Co. Ltd rose 0.7 percent to 1,325 yen and its smaller counterpart, Marubeni, rose 0.9 percent to close at 577 yen. But exporters closed mixed, particularly those reliant on debt- plagued Europe for revenue and Sony retreated 1.3 percent to 2,970 yen and Olympus declined 1.7 percent to 2,528 yen. Canon Inc., for its part however, leapt 1.9 percent to 4,265 yen, after The Nikkei business daily reported that the company is expected to log an operating profit of more than 500 billion yen ( 5.97 billion U.S. dollars) in fiscal 2011 through next December. Trading volume on Wednesday rose to 1.93 billion shares on the Tokyo Exchange's First Section, climbing from Tuesday's volume of 1.60 billion shares, with declining issues outnumbering advancing ones by 1,001 to 504.

Source