TOKYO, May 21 (Reuters) - Japan's Nikkei share average was little changed by midday on Thursday after profit-taking pulled shares down from the 2-1/2-month high hit earlier in the session.
The Nikkei share average was down 0.05% at 20,583.95, after rising as much as 20,734.91, its highest level since March 6. The broader Topix lost 0.11% to 1,493.06.
Although the market has rallied on hopes of a quick economic recovery following countries' move to ease coronavirus restrictions, investors have noted the market's valuations are getting stretched.
The Nikkei has rallied 8.8% so far this quarter after suffering a 20% loss in the previous quarter on worries about severe economic damages from the COVID-19 pandemic.
But there is a strong resistance around 20,800, where Nikkei's price-to-book ratio is estimated be around one, analysts said.
Among stocks, Bandai Namco fell 3.1% after the toy and game maker reported a drop in profits in the financial year that ended in March.
Shimadzu declined 2.9% as the precision machine maker's earnings in the last quarter and its outlook for the current year fell short of market expectations.
Many railway companies and cosmetic makers also tumbled, pressured by worries about a reduction in demand as more people work from home.
Keio fell 2.4%, Tokyo Corp lost 1.8%, and East Japan Railway shed 1.3%.
Among cosmetic makers, Shiseido slid 1.4%.
On the other hand, JXTG extended gains after it said on Wednesday it expected a recovery in profit this financial year after reporting a loss in the previous year, which ended in March.
Taiheiyo Cement gained 12.5% and Sompo Holdings rose 7.0% following their share buyback announcements. (Reporting by Hideyuki Sano in Tokyo; editing by Uttaresh.V)