HONG KONG (AP) -- Most Asian stock markets retreated Thursday, led by declines in Japan that followed a huge rally and China, which was preparing to shut down for a weeklong holiday.
Japan's Nikkei 225 fell 1.1 percent to 11,340.02 as investors cashed in their gains after the benchmark rose to its highest since Sept. 2008 in the previous session. The rally was sparked by the weakness of the yen, which hit a three-year low against the dollar. The yen regained some strength on Thursday, with the dollar buying 93.46 yen, down from 93.68 yen the day before.
South Korea's Kospi edged 0.1 percent lower to 1,933.55 while Hong Kong's Hang Seng dropped 0.4 percent to 23,155.03. Benchmarks in New Zealand, Singapore and Thailand also fell but Australia's S&P/ASX 200 gained 0.2 percent to 4,937.80.
Asia's other big loser was the benchmark Shanghai Composite Index in mainland China, which lost 1.3 percent to 2,402.48. China's smaller Shenzhen Composite Index slipped 0.2 percent to 949.46.
Chinese investors were most likely closing out their positions ahead of the Lunar New Year holiday next week.
"The market there has had a good run and people are just being nervous about remaining invested in the market over the Chinese New Year, when the market is closed for a week and they can't do anything," said Andrew Sullivan, director of Asian sales trading at Kim Eng Securities.
He said that holidays in China can be an especially uncertain time for investors because authorities in Beijing often use the occasion to announce new policy measures.
"So I think people are just taking their money off the table," said Sullivan.
Sullivan added that Japan's currency driven market rally may be over as investors bet there's little room for the country's currency to weaken further. Japan's Prime Minister Shinzo Abe has insisted that the country's central bank act more aggressively to ease monetary policy to help spur economic growth, but Sullivan said investors are worried that "is going to have a knock-on effect to every other currency in the world."
Shares of News Corp. fell 2.4 percent in Sydney after the media conglomerate cut its forecast for annual earnings, citing underperformance at several businesses including its Fox broadcast network.
U.S. stocks were flat on Wednesday as the latest earnings reports failed to impress investors. The Dow Jones industrial average rose less than 0.1 percent to 13,986.52 and the Standard & Poor's 500 rose less than 0.1 percent to 1,512.12. The Nasdaq composite was 0.1 percent lower at 3,168.48.
In energy markets, benchmark crude for March delivery was up 16 cents to $96.78 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 2 cents to end at $96.62 on Wednesday.
The euro weakened to $1.3512 from $1.3525 in late trading Wednesday.