Profit Taking by Traders Sends Nikkei Down 2.11% : * Investments: Treasury bond prices, the dollar changed little in overseas trading. U.S. exchanges were closed for the Good Friday holiday.

U.S. stock, bond and commodity markets were closed in observance of the Good Friday holiday, but stocks closed lower Friday in Tokyo after three days of gains as profit taking and futures-linked selling squeezed prices.

Treasury bond prices were mostly flat in overseas dealings Friday, while the dollar ended little changed in a day of sparse trading. Gold markets were closed.

In Tokyo, the 225-share Nikkei average was down 379.07 points, or 2.11%, to 17,580.69, with an estimated 300 million shares traded. But Japanese traders remained optimistic that the worst was over for the hard-pressed market.

“After the gains we’ve had, profit taking is only to be expected,” said trader Toranobu Sugai of Lehman Bros. “I don’t think this signals that the market is going to dive again all of a sudden.”

Despite its three-day winning streak, only the second this year, the Nikkei was down 269.97 points, or 1.51%, for the week. Brokers said the approach of the weekend, a long one overseas, also pushed traders to close out positions.

Most other Asian stock markets, including Sydney, Hong Kong, Singapore and Manila, were closed for Good Friday.

In bond trading in Japanese and European markets, the main 30-year U.S. Treasury bond fell 1/16 point, or 63 cents per $1,000 in face amount. Its yield was unchanged at 7.93%.

Yields on three-month Treasury bills were unchanged at 3.72% as the discount held at 3.65%. Yields on six-month bills were unchanged at 3.89% as the discount held at 3.77%. Yields on one-year bills were unchanged at 4.20% as the discount stayed at 4.03%.

A basis point is one-hundredth of a percentage point. The yield is the annualized return on an investment in a Treasury bill. The discount is the percentage that bills are selling below the face value, paid at maturity.

The dollar closed at 1.6685 German marks, down from 1.6695 on Thursday, and unchanged at 133.95 Japanese yen. Trading ended early, at 2 p.m., for the holiday.

Federal Reserve Chairman Alan Greenspan’s testimony before the Senate Banking Committee hardly drew any response in the foreign exchange markets.

Greenspan said last week’s cut in the key federal funds rate was motivated by sluggish money supply growth. He also said the U.S. economy’s current 2% growth rate is inadequate, but that the Fed expects a higher rate of growth later this year.

“Mr. Greenspan restated his readiness to make rate moves,” said Angelo Evangelista at Bank of Boston, “but the market is not just focusing on short-term rates.”

The British pound closed at $1.7460 from $1.7450 on Thursday. The dollar closed at 1.5460 Swiss francs, compared to 1.5445 on Thursday, and at 1.1815 Canadian dollars, from 1.1825.