Tokyo stocks ended lower today, their last trading day of 2020, but over the year the benchmark Nikkei index rose 16% to hit its highest annual close since 1989.
The bellwether Nikkei 225 index closed down 0.45%, or 124 points, to 27,444, while the broader Topix index slipped 0.8%, or 14.5 points, to 1,804.
Tokyo's financial markets will be closed until Monday.
"Investors locked in profits following yesterday's sizeable gain," said Shinichi Yamamoto, a broker at Okasan Securities in Tokyo.
"But sentiment remains strong because the year-end level is quite encouraging," Yamamoto told AFP.
In mid-March, the Nikkei index plunged some 30% from the end of 2019 on growing fears that the world was heading for a virus-fuelled economic catastrophe.
The coronavirus pandemic forced Japan to postpone the 2020 Olympics in late March and issue a state of emergency in April, but the index has since made a V-shaped recovery following a series of stimulus efforts.
The Bank of Japan maintained its asset-buying programme, including purchases of stocks, which has reportedly made the central bank the biggest shareholder in Japan's listed companies.
Investors also shrugged off Prime Minister Shinzo Abe's sudden resignation - with Yoshihide Suga, who replaced Abe in September, pledging to take over his predecessor's stimulus measures.
Some brokers warn the market is overheating, but Yamamoto said "the market is likely to remain bullish next year as companies are showing further recovery".
