TOKYO (Reuters) - Japan's Nikkei share average eked out modest gains on Tuesday despite giving up an earlier increase to above the key 10,000 mark after the Bank of Japan held off on easing monetary policy following a two-day policy meeting.
"Investors were expecting so much (from the BOJ). That was why the market cut gains," said Hisao Matsuura, equity strategist at Nomura. "But we have not changed our view of the Japanese equity market. We may see some corrections but these will provide good opportunities to buy."
The Nikkei was up 0.1 percent at 9,899.08 after trading around 9,995 before the announcement from the BOJ, which surprised markets last month by boosting its asset-buying scheme by 10 trillion yen and setting a 1 percent inflation goal.
The benchmark Nikkei climbed above 10,000 earlier in the session as investors looked for signs for further easing from the central bank. It was the third session in a row the Nikkei failed to hold above 10,000, a closing level not seen since late July.
"We are left with a strong impression after this that the 10,000 mark is a heavy resistance level and it will be a key focus to see whether the index can end above that level later this week," said Masayuki Otani, chief market analyst at Securities Japan.
"We've been breaking the speed limit with regards to Nikkei's recent rally. Now's a good time to consolidate and take profits as investors go into book-end. After the end of the month, buying will increase."
March is the final month of Japan's fiscal year, and market participants have expected many funds to lock in profits from this year's 17 percent rally on the Nikkei after shedding more than 13 percent in April to December.
Investors will shift their focus to the Federal Reserve meeting later in the day, although the U.S. central bank is expected to stand pat on monetary policy.
Real estate stocks cut gains, with the sector index .IRLTY.T up 1.4 percent and Mitsui Fudosan Co Ltd (8801.T) adding 2.5 percent as investors bet for additional accommodative policies. The sector was also helped by an upbeat note from Credit Suisse, which maintained its "overweight" rating.
The broader Topix ended flat at 845.33.
About 2.76 billion shares changed hands on the main board, up from 2.26 billion on Monday.
Sumitomo Heavy Industries Ltd climbed 2.9 percent after Goldman Sachs upgraded the company to "buy" from "neutral" in a sector review.
In the same report, Goldman reiterated industrial robot maker Fanuc Ltd (6954.T) as its top pick for the machinery sector. Fanuc advanced 0.8 percent.
Among heavily traded shares, Mazda Motor Corp.
lost 3 percent after Mitsubishi UFJ Morgan Stanley Securities downgraded the automaker to "underperform" from "neutral" and cut its price target.
Asahi Kasei Corp (3407.T) shed 5.4 percent after it said it would buy U.S. medical equipment maker Zoll Medical Corp ZOLL.O for $93 a share, a 24 percent premium to Zoll's closing price on Friday, or $2.21 billion.
"I think this is a positive move in the long term and a sign that it (Asahi Kasei) is speeding up its global reach," a trader said. "But people are concerned about the (price) of the acquisition and its impact on the company's finances."
Additional reporting by Mari Saito; Editing by MAtt Driskill