TOKYO, Mar. 30 -- Tokyo stocks fell Tuesday, with the key Nikkei stock average retreating 0.21 percent on lingering concerns about radiation leaks at the crippled nuclear power facility in northeastern Japan, although losses were limited by other Asian bourses advancing in afternoon trade lending some support, coupled by and increase in futures buying.
Brokers said that futures buying in the afternoon was likely only a short-term solution for the market however and indicated that the greatest concern among investors was the adverse impact the March 11 quake, tsunami and ongoing nuclear crisis in Fukushima prefecture is and will have on corporate earnings.
The market took some heart in news Tuesday that reactor buildings overflowing with contaminated water hadn't leaked into the sea via the facility's drainage system, but brokers said fears remained as the situation is far from under control and a total cold shutdown of the radiation-leaking six-plant complex still seems some way off.
"Until the reactor can be cooled automatically, the situation remains critical and it could impact company earnings," said one local senior asset manager. "However, we're starting to find out that it probably won't become a tragedy," he said.
Fears were exacerbated however following news highly toxic plutonium had been found in soil samples around the nuclear plant, but some analysts suggested that the market was quick to react to the news, opting to believe Japan's nuclear safety agency that the levels found posed no risk to human health -- despite the same mantra being heard about the majority of incidents of radiation leakage.
"The market has digested the plutonium contamination news, and there is support from seemingly solid U.S. economic recovery prospects," said Tatsunori Kawai, chief strategist at kabu.com.
But buying was somewhat stifled by circumspect investors reacting to news from the U.S. Environmental Protection Agency that exposure to the level of plutonium found for 30 minutes would trigger nausea and exposure for four hours might lead to death within two months.
Added to this, investors were reluctant to chase stocks higher, as more than 2,000 Japanese firms went ex-divident Tuesday, meaning shares purchased would not be eligible for fiscal end-term payouts.
The 225-issue Nikkei Stock Average dropped 19.45 points from Monday to close at 9,459.08, while the broader Topix index of all First Section issue on the Tokyo Stock Exchange lost 7.64 points, or 0.89 percent, to close at 850.21.
Shares of the beleaguered operator of the stricken Fukushima No. 1 nuclear power plant, Tokyo Electric power Co. (TEPCO), plunged on rumors -- subsequently denied by the government -- that the firm may be nationalized by the state.
Nevertheless, Prime Minister Naoto Kan echoed his top spokesman 's hints last week that the stricken plant would be decommissioned once the crisis was under control.
TEPCO fell by its daily allowable limit for a second straight day to close at 566 yen, a drop of 18.7 percent, marking its lowest closing level since 1964.
TEPCO's CEO Masataka Shimizu's time at the helm of the utility firm is likely coming to an end as the crisis at the plant has caused the company to lose 29 billion U.S. dollars in market value.
Insurance-related issues were among biggest decliners as an industry body announced Tuesday that policy holders affected by the March 11 quake and tsunami will be covered for claims.
Dai-ichi Life Insurance fell 5.2 percent to 118,400 yen and financial issues also underperformed the broader market.
Sumitomo Mitsui Financial Group retreated 2.9 percent to 2,623 yen and Mizuho Financial Group slumped 6.0 percent to 140 yen, following the Financial Services Agency saying on Monday it would inspect Mizuho Bank over its recent computer glitches, which caused the delay in salary payments for millions of people across Japan.
Exporters closed mixed on fluctuating fears of slowing production due to battered supply chains and Toyota Motor declined 1.2 percent to 3,255 yen, but Sony Corp. rose 0.5 percent to 2,613 yen.
Trading volume on Tuesday dropped to 2.92 billion shares on the Tokyo Exchange's First Section, down from Monday's volume of 2.86 billion shares, with declining issues edging out advancing ones by 865 to 705.