The Nikkei share average retreated on 2024's last trading day on Monday from the five-month high hit in the last session, as investors locked in profits on the index that rose nearly 20% for the year.

The 225-issue Nikkei index fell 0.96% to close at 39,894.54 after opening 0.11% higher. It ended at a five-month closing high of 40,281.16 on Friday after a three-session winning streak.

The benchmark index finished at its best year-end level ever, topping the previous high of 38,915.87 on Dec. 29, 1989, when Japan was in the speculation-driven bubble economy.

The index rose 19.22% this year, underpinned by a weaker yen and the central bank's low-rate policy. In 2023, it had gained 28%.

The broader Topix index eased 0.6% to 2.784.92.

"Investors sold stocks today because they could not find clear reasons for the Nikkei to cross the 40,000 levels," said Fumio Matsumoto, chief strategist at Okasan Securities.

"But that does not mean investors are pessimistic about the market in the coming year. They may just want to avoid risks during the market close in Japan for the new year, which is longer than usual."

Japanese markets will reopen on Jan. 6 after closing for the New Year holidays starting Tuesday.

Uniqlo owner Fast Retailing shed 1.59% to drag on the Nikkei the most. Chip-testing equipment maker Advantest fell 2.6%.

Nissan slipped 5.73% to become the biggest loser in percentage terms on the benchmark. The carmaker surged 33.7% this month as merger talks with Honda surfaced. However, the stock ended the year 13.39% lower.

Fujikura, which makes wire cabling for data centers, grew sixfold this year, becoming the top gainer in percentage terms on the Nikkei.

Lasertec, which makes inspection equipment used in the production of semiconductors, fell 59% this year and was the Nikkei's worst performer.