* Exporters sold after yen strengthens
* Banks, insurers underperform on falling U.S. yields
TOKYO - Japan's Nikkei tumbled on Tuesday afternoon with foreign investors selling off exporters and financials, while profit-taking continued on cyclical stocks that rallied the day before.
The Nikkei share average fell 2.2 percent to 22,076.73 in mid-afternoon trade.
The index rose to a two-week high on Monday as investors took heart after the United States and China suspended the imposition of new tariffs on the weekend.
The broader Topix fell 2.3 per cent to 1,650.92, with all of its 33 subindexes in negative territory.
Analysts said that the market had priced in the Sino-U.S. trade truce and was looking to more events ahead, such as U.S. jobs data on Friday and the Federal Reserve's policy meeting later this month.
"Even after the market priced in the trade news, there are still major events ahead so investors realised that they can't be overjoyed yet," said Yutaka Miura, a senior technical analyst at Mizuho Securities, adding that foreign investors and hedge funds are seen reducing their positions on risky assets.
A stronger yen also soured sentiment, with traders citing stepped up selling by foreign investors that depressed exporters.
Fanuc Corp stumbled 4.8 per cent, Komatsu Ltd dropped 4.3 per cent and Tokyo Electron slid 2.8 per cent.
The dollar fell 0.6 per cent to 113.10 yen.
Banks and insurers, which typically accumulate higher-yielding products such as foreign bonds in their portfolios, lost ground after the U.S. benchmark 10-year yield slipped to 2.966 per cent, the lowest since Sept. 13.
Mitsubishi UFJ Financial Group dropped 2.4 per cent, Sumitomo Mitsui Financial Group tumbled 2.6 per cent, while Dai-ichi Life Holdings shed 3.2 per cent.
Baby bottle maker Pigeon Corp plunged 4.3 per cent after the firm's decision to keep its full-year outlook unchanged disappointed investors, although its net profit for the February-October period rose 17 per cent on the year to 12.2 billion yen.
Tea beverage maker Ito En stumbled 5.5 per cent after its net profit for the May-October period dropped 5.9 per cent on the year to 8.698 billion yen, pulled down by a special loss related to torrential rain that hit Japan in July.