Tokyo: Japanese stock indices dropped for a third consecutive session, with government bond yields hitting their highest levels in 17 years, as investors cashed in profits to capitalize on prior gains, following the largest indirect foreign investment inflows in four months.

According to Qatar News Agency, the Nikkei 225, which includes 225 issues, ended Thursday's session down 0.65 percent (278.38 points), closing at 42,610.17. The broader Topix index fell 0.52 percent (15.96 points), ending at 3,082.95.

In FX, the US dollar rose around 0.18 percent against the yen to JPY 147.59 in morning trading. The 10-year Japanese government bond yield held at about 1.609 percent, after touching 1.615 percent, marking its highest since 2008.

SoftBank Group shares dropped 2.01 percent (JPY 300) to reach JPY 14,590, and Tokyo Electron, a maker of chip-making equipment, fell 2.41 percent (JPY 505) to JPY 20,420.