TOKYO, Apr 11 (Reuters) The Nikkei average fell for the second straight session on Tuesday, giving up 0.22 percent as shares in Advantest Corp. and other chip-related firms lost ground after a brokerage downgrade.
Energy firms such as INPEX Holdings Inc. rose after U.S. crude futures hit their highest level in nearly three months, while Nippon Mining Holdings Inc. and other commodity firms gained on record metals prices.
Before the start of afternoon trade, the Bank of Japan announced it would continue with its policy of keeping a key short-term interest rate around zero percent. While the move was widely expected, it may have helped bolster investor sentiment, analysts said.
Shares in chip-related firms were sold after brokerage Mizuho Securities downgraded its rating on several stocks in the sector, said Hideyuki Suzuki, investment information manager at SBI Securities.
''Already there were concerns about the overall market being overheated, and since these (chip) firms are big contributors to the Nikkei 225, they looked already ripe for profit-taking. Then that report came along, and sparked the selling,'' he said.
The Nikkei finished down 38.45 points at 17,418.13.
On Friday it booked its highest close since July 2000.
The TOPIX index was down 0.40 percent at 1,770.18.
Advantest, the world's biggest maker of chip-testing devices, was down 2.8 percent at 14,580 yen, after Mizuho cut its rating, citing expectations of lower growth in the sector.
Shares in NEC Electronics Corp. fell 2.9 percent to 4,620 yen after Mizuho lowered its rating and said the stock appeared overpriced at current levels.
But oil and natural gas developer INPEX Holdings continued its recent advance, gaining 2.4 percent to 1.26 million yen.
U.S. crude futures rose to a barrel on Tuesday, their highest since late January, due to growing tension over Iran's nuclear programme and continuing supply disruptions in Nigeria.
BOJ BOOSTED SENTIMENT The Bank of Japan's decision to keep its policy of near-zero rates unchanged may have helped lift sentiment, said Soichiro Monji, a strategist at Daiwa SB Investments.
''I didn't think the (outcome of the policy meeting) was something the market was very worried about, however stock prices are trimming losses and there isn't really another factor moving the market,'' he said.
''If you consider this from the viewpoint of those investors want to buy on dips, the decision was a source of increased relief.'' Commodity firms also gained, as both copper and zinc prices hit record highs, while gold rose to its highest level since 1980.
Nippon Mining, which includes Japan's largest copper smelter among its holdings, rose 7 percent to 1,097 yen.
Brokerage Goldman Sachs said on Tuesday that Nippon Mining's profit outlook was conservative, and it expected further rises in copper prices.
Shares in Toho Zinc Co. Ltd. advanced 3 percent to 1,220 yen.
Trade was slow, with 1.88 billion shares changing hands on the Tokyo exchange's first section, compared with last week's daily average of 1.99 billion shares.
Decliners outnumbered gainers by a ratio of more than 2 to 1.
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