The stock markets in Tokyo, Japan slipped into negative territory on Friday, as investors paused to lock in profits following a sharp rally over the past few trading sessions.

The bench mark Nikkei 225 Index shed 9.36 points, or 0.11%, to close at 8,627, and the broader Topix Index of all First Section Issues declined 2.28 points, to close at 824.

On the economic front on Friday, a report revealed that consumer prices in Japan for the year to February were little changed. The government reported that the core consumer price index was unchanged in February from one year earlier, while the overall CPI was down 0.1% year-on-year. The report showed that overall inflation was down 0.3% compared to one month earlier.

Core consumer prices in the Tokyo metropolitan region were up 0.4% in March following a 0.6% increase in February. Tokyo's overall CPI was up 0.3% year-over-year. Tokyo data is considered a leading indicator of the nationwide trends.

Meanwhile, retail sales in Japan plummeted by 5.8% in February when compared to a year earlier, according to government data. The decline was the sharpest in 7 years and the fifth straight month of lower retail sales. The government noted that the year-over-year decline is partly attributable to the leap year adding an extra business day to last year's calendar. Sales by large-scale retailers were down 8.2% following an upwardly revised decline of 5.5% in January.

Property firms ended higher following media reports that Japan's ruling coalition is considering plans to set up an investment fund of 1 trillion yen that will use money raised from the public and private sectors to buy properties held by real estate investment trusts and make loans to REITs. Mitsui Fudosan gained 2.89% and Mitsubishi Estate advanced 1.55%.

Financial stocks ended weak on profit taking. Mitsubishi UFJ, Japan's biggest bank, declined 2.41%. Sumitomo Mitsui lost 3.03% and Resona Holdings fell 5.53%. Shares of Mizuho Financial dropped 6.09% and brokerage Nomura Holdings moved down 1.08%.

Among the major exporters, Canon rose 1.85%, but Sony declined 1.89%. Automakers advanced on optimism about revival in global demand. Toyota gained 0.93% and Honda advanced 3.79%. Honda said Thursday that an assembly plant under construction in Japan would not come on stream until 2012 or later. The factory was originally slated to open in 2010, but was delayed by more than one year to 2011 or later.

Oil-related stocks also ended mixed. While Inpex edged down 0.14%, Nippon Oil rose 1.33% and Showa Shell advanced 1.87%. Meanwhile, among trading houses, Mitsubishi Corp. gained 1.24% while Sumitomo Corp. slipped down 0.86%.

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