The Nikkei average sagged 0.47 percent on Friday as a government downgrade of its view on private consumption and exports spurred selling, but Advantest Corp. and other chip stocks rose, curbing market losses.
Hitachi Co. Ltd. dropped after the company said it would fall to a net loss for the year to next March, while shares of online community site Mixi Inc. ended at 3.12 million yen after being traded for the first time on Friday, nearly double its IPO price.
The government monthly economic report had some downward revisions and that was an unexpected surprise. That is weighing on the market, said Masayoshi Okamoto, head of dealing at Jujiya Securities.
The Nikkei lost 75.46 points to 15,866.93. On the week, the benchmark lost 1.33 percent. The broader TOPIX index was 0.29 percent lower at 1,593.43.
Tokyo financial markets will be closed on Monday for a national holiday.
The Japanese government left its overall assessment of the economy unchanged in a monthly report on Friday, saying it was recovering, but downgraded its view on private consumption for the first time in 19 months. It also revised down its assessment of exports. [ID:nT239272]
Daisuke Yoshida, fund manager at Fuji Investment Management, said he is neither pessimistic nor optimistic.
There are certainly worrying weak economic data lately, but we are not at the point where we can confirm that the economy is peaking out, he said. For that reason, I expect the market to be in a range.
The market struggled to advance ahead of key U.S. data on consumer prices and a meeting of G7 finance ministers and central bankers, said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities Inc. Investors are trying to square their positions for now, he said.
The market felt a limited impact from the news that Internal Affairs Minister Heizo Takenaka, seen as having played a key role in Japan's reforms, will resign as a lawmaker later this month.
Hitachi tumbled 3.1 percent to 694 yen after it expected a group net loss of 55 billion yen for the current year to March, against a 55 billion yen profit it previously projected. It also chopped its group operating profit forecast by 38 percent.
Toshiba Corp. ended down 1.1 percent at 792 yen. After the market closed, Toshiba said it would buy chip-related patents from Micron Technology Inc. and secure licences for all the patents held by Micron unit Lexar Media Inc. for $288 million. [ID:nTKU002730]
It also set a dividend forecast for the fiscal first half ending this month at 4.5 yen per share, up from 3 yen, matching the figure reported earlier in business daily Nihon Keizai.
Okamoto of Jujiya Securities said the stock fell because the dividend amount was lower than what the market had anticipated.
Advantest, the world's largest chip testing device maker, rose 1.5 percent to 11,830 yen after an industry body said on Thursday that global sales of chip-making equipment in July jumped 41.6 percent from a year earlier.
Mitsubishi Corp. , Japan's largest trading house, remained lower, skidded 1.8 percent at 2,185 yen. After the market closed, the company said it would pay up to 8.9 billion yen to acquire unlisted chemical company Kohjin Co.
In the game sector, Nintendo Co. Ltd. gave up 3.3 percent to 22,340 yen as investors who bought on expectations of strong sales of its new game console Wii took profits.
Nintendo announced on Thursday it would start selling the Wii in Japan on Dec. 2 for 25,000 yen, making it the third and last major game maker to bring a next-generation console to market.
Mixi, Japan's second-most visited site after Yahoo Japan Corp. , finished at 3.12 million yen after listing shares on Thursday. That was slightly lower than bids had indicated at the close the previous day.
The company, which operates the nation's largest social network site used by 5.7 million people to chat, post blogs and create message boards to communicate with people who share similar interests, first traded at 2.95 million yen.
Trade volume slowed with 1.42 billion shares changing hands, the lowest since Aug. 29. Decliners outnumbered advancers by a ratio of nearly two to one.
Online brokerage kabu.com Securities Co. Ltd. jumped 4.3 percent at 218,000 yen, rising on expectations for a strong start Friday evening for its new after-hours trading service.
The service will run from 7:00 p.m. (1000 GMT) to 11:00 p.m. daily. It is the country's first auction-style proprietary system for after-hours trading and is targeted at businessmen who want to trade after returning home from work.
Hiroyuki Fukunaga, chief strategist, research division at Rakuten Securities, said the market has some potential.
I know some salarymen want to trade stocks at home at night. There is also a need for after-hours trading, especially as corporate news such as earnings numbers tend to come out after the regular market closes, he said.
But the market may be too small for institutional investors, especially for foreign investors, key players in the Japanese stock market, said Takahiko Murai, general manager of equities at Nozomi Securities.
Investors allocate their funds according to the market value. So if U.S. stocks rise, that would create more value for the U.S. market, which then allow investors to buy Japanese stocks, he said.