(Reuters) - Japan's Nikkei share average rose modestly on Friday after signs of strength in the U.S. economy but it slipped for the week, as investors continue to worry about the impact of Europe's debt crisis.
Online gaming firm Nexon Co was the biggest loser on the main board, falling more than 11 percent as it continued
to drop from its disappointing trading debut on Wednesday.
Olympus also continued to slip as the company faced its creditors after restating accounts following a 13-year fraud that dented its balance sheet, prompting speculation it will need to raise capital to repair its finances.
The benchmark Nikkei ended up 0.3 percent at 8,401.72, but marked a 1.6 percent loss on the week. The broader Topix index slipped 0.2 percent to 723.56, losing 2 percent on the week.
Southeast Asian stock markets gained on Friday after better data on the U.S. economy helped offset worries about the euro zone, at least for now, and Indonesia led the way after a credit rating upgrade and approval of an important land bill.
A fall in unemployment benefit claims and stronger-than-expected regional factory activity in the United
States suggested an improvement in the world's largest economy, helping Southeast Asian markets snap a three-day losing streak.
Indonesia gained 1.8 percent from its lowest close since Nov. 29 in heavy volume, backed by net foreign buying of
$34 million, after Fitch gave it an investment-grade rating.
The passage of a land acquisition bill by parliament also boosted the market in Jakarta. It is expected to help speed up big government infrastructure projects.
Singapore gained 0.9 percent, the Philippines 0.5 percent, Thailand 1 percent and Malaysia 0.1 percent. Vietnam gained 0.4 percent,recovering from a 2-1/2-year low.
Returning to Japan's markets, investors awaited a vote in the Italian parliament on Friday to expedite approval of a 33 billion euro ($43 billion) austerity package, with fears of possible downgrades of the credit ratings of euro zone countries still looming.
In addition to macroeconomic developments, investors will be watching some key technical levels for clues to the benchmark's direction. The Nikkei remained below its 25-day average, which is now a resistance point around 8,484.
If the Nikkei can top its 25-day moving average again, even as trading becomes thinner ahead of the Christmas holiday, that would be a hopeful sign, said Yutaka Miura, a senior technical analyst at Mizuho Securities.
If there is no bad news about Europe, the Nikkei could rise as traders cover short positions ahead of the holiday, he added.
But Kakuya Kojoh, manager of securities at Nissan Century Securities, said a fall near the Nov. 27 low of 8,135 could not be ruled out.
While some had hoped for year-end buying -- the Nikkei has gained in December in seven of the last eight years -- it looked questionable with the Nikkei now down 0.4 percent on the month.
Volume has been thin in recent sessions, with 1.48 billion shares changing hands on Friday, down from 1.54 billion on Thursday. About twice as many shares slipped as advanced.
Upbeat economic data, including a fall in U.S. weekly jobless claims to a 3-1/2 year low and improved U.S. regional factory data, prompted some players to buy back cyclical shares.
These included shipping firms, which had dropped sharply in the previous session. The shipping subindex was Friday's best performer, gaining 3.8 percent.
The euro was just a step away from hitting a decade low against the yen. That pressured shares of exporters with big exposure to Europe, such as precision machine makers.
The Tokyo Stock Exchange's precision machine makers subindex fell 0.4 percent.
Olympus ended down 3.6 percent to 1,004 yen as short-term buyers who had bought it on hopes the company would submit restated earnings to stay listed closed their positions. Shares tumbled more than 20 percent on Thursday, and have lost more than half their value since an accounting scandal erupted in mid-October.
Fujifilm Holdings Corp lost 1.3 percent to 1,817 yen after it said on Thursday it would buy U.S.-based medical
equipment maker SonoSite Inc for about $753 million.
Nexon lost 11.6 percent to 1,100 yen after opening slightly higher Friday morning. Gains evaporated as it continued to drop from its disappointing trading debut on Wednesday following its $1.2 billion IPO, Japan's biggest this year.
But Gree climbed 0.5 percent to 2,500 yen and was the fourth-heaviest traded issue by turnover, and rival DeNA rose 5.2 percent to 2,302 yen, after Nomura Securities assigned buy ratings to the social gaming companies after suspending ratings due to a change of analyst.
Nomura, which said it is bullish on net-related firms due to factors including the increased use of smartphones, chose Cyber Agent as its top pick among Internet shares. The firm advanced 4.2 percent to 248,300 yen.
(Reuters Writer Shihar Aneez contributed to this report.)