Nikkei slips for 2nd day

Japan's Nikkei share average slipped for a second day on Tuesday as investors bagged profits on blue chip stocks following February's 10.5 percent rally, although some attractive valuations and a softer yen supported sentiment. The benchmark Nikkei closed 0.6 percent lower at 9,637.63 after losing 0.8 percent on Monday. Mid-last week, the index touched a 7-month high of 9,866.41.

March, the final month of Japan's fiscal year, tends to be the strongest month for the Nikkei, with an average monthly rise of 1.43 percent for the index between 1972 and 2011. Reflecting that, the Nikkei volatility index, a fear gauge, fell 2.8 percent on Tuesday. The lower the volatility index, the higher the risk appetite.

China-related shares extended losses for a second session, with the Nikkei China 50 index down 1.4 percent after the world's second-largest economy cut its 2012 growth target to an 8-year low of 7.5 percent, as Beijing looks to reduce its reliance on external spending and foreign capital.

Among China-related shares, construction machinery maker Komatsu Ltd slid 2.3 percent and industrial robot maker Fanuc Ltd shed 2.5 percent.

The Nikkei has risen 14 percent so far this year, boosted by a run of U.S. economic data suggesting a robust recovery and accommodative policies by global central banks that have pushed investors back into risk assets.

Market participants said that domestic institutional investors' selling had capped recent gains.(Reuters)