The 225-issue Nikkei average on the Tokyo Stock Exchange fell 22.78 points to finish at 13,820.68. The Topix index of all issues in the first section on the Tokyo Stock Exchange closed down 5.76 points at 1,042.98. Activity was light, with an estimated 340 million shares changing hands against 318.6 million shares on Monday.

Share prices rose from the outset on public sector buying, but failed to maintain their gains, depressed by profit-taking, brokers said. "Although share prices rose on the gains overnight, follow-through buying did not continue due to a lack of fresh leads," a broker at Chuo Securities Co Ltd.

"We saw modest buying interest from retail investors, but the strength here is not enough to give share prices a sustained lift," the broker said.

"With the bank recapitalisation scheme, the downside of share prices should be firm, butinvestors are not able to see how banks will react in detail to the implementation of the scheme. "As well, investors doubt the likely impact of the scheme in resolving the ongoing credit crunch."

Investors were not impressed by the government's plans for a new stimulus package, as it still lacked details, brokers said. News reports said the Japanese government planned to pass a supplementary budget for the year to March expected to top 10 trillion yen ($ 84.0 billion).

"The government's decision to proceed with fresh stimulus measures is, naturally, a positive for the market, but it lacks details," a Nippon Global Securities broker said. "I expect the Nikkei 225 index to continue to hold at around the 14,000-point level until concrete measures in the next stimulus package emerge. "Investors will continue to hunt for bargains at below 14,000 points," he said.