Japan's Nikkei share average reversed early gains on Monday, with a report flagging a possible early end to the Bank of Japan's (BOJ) negative interest rate policy.
The Nikkei fell 0.19% to 32,544.04 by the midday break after opening 0.26% higher. The index initially tracked Wall Street's gains at the end of last week.
In an article in the Yomiuri newspaper published over the weekend, BOJ Governor Kazuo Ueda said the central bank could end its negative interest rate policy when achievement of its 2% inflation target was in sight, signalling possible rate hikes.
"The impact was directly reflected in today's market, with financial stocks leading the gains, while real estate stocks were beaten down," said Takehiko Masuzawa, trading head at Phillip Securities Japan.
"But the market was not in a broad sell-off. Value shares rose."
The Tokyo Stock Exchange's banking index jumped 3.85% to become the top gainer among the 33 industry sub-indexes. The insurance sector rose 1.74% and the brokerage sector gained 1.26%.
Financials dominated the list of top 10 gainers on the Nikkei. Resona Holdings jumped 6% to lead the chart.
Sumitomo Mitsui Financial Group rose 4.55% and Mitsubishi UFJ Financial Group climbed 3.71%.
Property developer Sumitomo Realty & Development fell 4.26% to become the worst performer on the Nikkei, followed by peer Mitsui Fudosan, which lost 4.04%.
Chip-related shares fell, with Tokyo Electron and Advantest shedding 2.27% and 2.17%, respectively.
The broader Topix was up 0.1%, with its value index rising 0.65%, while the growth index slipped 0.5%. (Reporting by Junko Fujita; Editing by Subhranshu Sahu)