Japanese stocks slip from three-and-half-month highs

MSCI's broadest index of Asia-Pacific shares outside Japan stumbled 0.7 percent, retreating from a 1-1/2 month high hit on Tuesday, with technology sector the biggest drag. Japan's Nikkei dropped 1 percent and South Korea's Kospi index declined 0.6 percent. China's SSE Composite index and the blue-chip CSI 300 slipped 0.3 percent each.

TOKYO: Japanese shares dropped on Tuesday morning from 3 1/2-month highs hit the previous day, with financial shares leading declines as investors booked profits on signs of an apparent peak-out in U.S. bond yields.

The Nikkei dipped 0.1 percent to 22,979 while the Topix fell 0.3 percent to 1,808.30, weighed down by financial sectors.

Helping Tokyo markets rise one day earlier was the reduction of fears of a trade war between China and the United States, which was a key factor behind Wall Street's solid gains overnight.

Japanese insurance companies extended their fall so far this week to 3.8 percent, as U.S. bond yields have slipped from near seven-year highs. Higher U.S. yields were seen as boosting investment returns for Japanese insurers.

Investors locked in gains in the sector, one of the best performers since March as trade war worries had engulfed exporters and others vulnerable to tariff threats.

Banks shed 0.7 percent, with MUFG falling 1.1 percent.

Defensive shares also succumbed to profit-taking, with food companies and retailers both falling 0.5 percent.

Most sectors were down among Topix 33 sector indexes, with only two with strong relations to resources - oil companies and wholesale companies - making substantial gains, thanks to firm energy prices. - Reuters