Japan shares fall on profit-taking, REIT index hits highest in 3 years

* Dollar/yen back to mid-107 yen zone, hurts exporters
* Cyclical shares lead losses; Fast Retailing jumps
* TSE's REITs index hits more than 3 year-high
* Investors on sidelines ahead of U.S. holiday, jobs data

By Tomo Uetake
TOKYO, July 3 (Reuters) - Japanese stocks retreated on
Wednesday, pressured by a stronger yen and profit taking among
exporter stocks and other cyclical names ahead of an upcoming
U.S. holiday and employment data.
Japan's benchmark Nikkei share average .N225 ended 0.5%
lower at 21,638.16 points, just below its two-month high touched
on Tuesday.
"Equities have lost their shine as post-G20 euphoria faded
quickly," said Yasuo Sakuma, chief investment officer at Libra
Investments.
"Traders moved to lock in profits and to the sidelines
before the (U.S.) Independence Day and key data releases."
U.S. financial markets will have a half day of trading on
Wednesday and a full day off on Thursday for the Independence
Day holiday. On Friday, the U.S. Labor Department is due to
release non-farm payrolls data for June.
The stronger yen hit cyclical stocks, particularly
export-oriented firms.
Nissan Motor 7201.T dropped 2.1%, Mitsubishi Motors
7211.T fell 1.5%, Mazda Motor 7261.T shed 1.6% and Honda
Motor 7267.T declined 1.7%, while Advantest Corp 6857.T
tumbled 4.7%.
The dollar fell 0.2% against the yen was last traded at
107.67 yen JPY= .
Japanese exporters are sensitive to gains in the yen, which
tend to dent profits by making their products more expensive
abroad and slashing the value of repatriated earnings.
A fall in crude oil prices also caused investors to sell
energy shares, with the country's biggest oil and gas explorer
Inpex Corp 1605.T slipping 2.4%.
Index heavyweight Fast Retailing 9983.T soared 2.7% after
the clothing chain operator announced its Uniqlo same-store
sales rose 27.3% in June from a year earlier, the biggest
year-on-year growth in six years. The Tokyo Stock Exchange's REIT index .TREIT advanced 0.3%
to hit its highest level since April 2016, supported by
institutional buying.
The broader Topix .TOPX dropped 0.7% to 1,579.54.