Tokyo: Japan's Nikkei stock average eased from a six-month high in choppy trade on Thursday, but sentiment remained relatively robust on the back of easing steps from the Bank of Japan that have weakened the yen.
After making hefty gains this week, the Nikkei could aim for 9,500-9,600 this month if trading volume continues to grow, market participants said, although they cautioned it was likely to be a slow and steady climb.
"The fact that autos and financials haven't seen any major adjustment after big gains is an indication of the strength of current market sentiment," said Yumi Nishimura, senior technical analyst at Daiwa Securities.
"Domestic investors are still somewhat bearish on the market which can also be interpreted as a sign that there is room for the market to aim higher," she said.
Some bluechip exporters fell as investors took profits after a strong rally the previous day. Toyota Motor Corp slipped 0.6 percent in high volume and Nissan Motor Co eased 1.1 percent. Mitsubishi UFJ Financial Group lost 1.5 percent.
The benchmark Nikkei dropped 0.3 percent to 9,235.89 by the midday trading break, well above its 200-day moving average near 9,048, with the market largely shrugging off signs that a second bailout for Greece may be delayed.
The broader Topix was down 0.3 percent at 800.29.
Some laggard stocks rose. Nintendo, which shed more than half of it value last year, jumped 2.9 percent.
The Nikkei is up 9.2 percent so far this year, supported by the return of foreign investors, who were net buyers of Japanese stocks for the seventh straight week through Feb. 11.
Goldman Sachs wrote in their portfolio strategy note on Wednesday that Japanese equities were finally catching up to the global rally and said it had now expanded its cyclical recommendation to banks, insurance and real estate.
Goldman lifted its six-month Topix target by 24 percent to 900 from 725, representing upside of 12 percent from current
Nomura was also bullish, writing in note that continued buying of high-beta stocks will support automakers, machinery, financials and trading sectors.
Investors shrugged off reports on Wednesday that European Union finance ministers are examining ways of delaying parts or even all of a second bailout.
"The news of a Greek delay may prompt profit-taking in overheated markets, but fundamentally speaking the talks are advancing towards a bailout ... Global markets are flooded with liquidity as a result of central banks' easing policies, so even if shares fall today, there will be plenty of buyers on dips," said Hiroichi Nishi, equity general manager at SMBC Nikko Securities.
Earlier, Greece's political leaders agreed to the two final demands set by its international lenders to secure a bailout package.