Tokyo stocks ended lower practically across the board on Thursday following a volatile session, with fears over a possible interest rate increase in China spurring selling in the afternoon.
The 225-issue Nikkei average plunged 215.29 points, or 1.91 percent, to close at 11,027.05, managing to finish above the key 11,000 line after falling to an intraday low of 10,963.56 late in the session.
The broader Topix index of all first section issues on the Tokyo Stock Exchange lost 17.31 points, or 1.52 percent, to close at 1,119.56.
A news report that China is set to raise interest rates and electricity prices to cool the overheating economy dampened investor sentiment, brokers said. Investors began unloading stocks after the Nikkei hit an intraday high of 11,358.51, its highest level on an intraday basis since 11,392.79 on May 10.
Market players snapped up shares in the morning on overnight gains in U.S. blue-chip shares and on optimism over Japan's economic outlook, but gains were undermined by a bout of profit-taking in the afternoon.
Market participants also locked in profits ahead of a general meeting of the Organization of Petroleum Exporting Countries later Thursday in Beirut and Friday's release of a U.S. jobs report for May.
"After buying ran its course, investors opted to lock in profits," said Norihiro Fujito, a senior investment strategist at Mitsubishi Securities Co.
The main decliners in the Tokyo market were insurance, securities, and information and telecom issues.