TOKYO: Tokyo stocks closed 0.17 percent lower Friday, ending a seven-day rally as the stronger yen and lingering concerns about the US economy cancelled out a strong lead from Wall Street.
The benchmark Nikkei 225 index slipped 24.97 points to 14,561.54, while the Topix index of all first-section shares inched down 0.06 percent, or 0.73 points, to 1,205.52.
Profit-taking pulled Tokyo into negative territory, after US investors powered the S&P 500 to an all-time high Thursday, as Washington politicians reached a deal to reopen the government and avert a debt default.
"There are concerns about a potential slowdown of the US economic recovery as a result of the government shutdown and the fiscal deadlock," said Yoshihiro Okumura, general manager for research at Chibagin Asset Management.
"Also, as the US recovery does not appear to have gained solid footing, monetary easing will likely be in place for the near-term, which will cap the dollar's rise," he said.
Investors have been waiting for the Federal Reserve to provide a timeline for pulling back on its $85 billion-a-month bond buying plan, but it has said its next move hinges on the state of the economic recovery.
And the temporary nature of the US debt agreement means another round of political deadlock could re-start in January, said Sumitomo Mitsui Banking Corp. strategist Daisuke Uno.
"These kinds of disruptions will hurt the US economy enough so that the Fed will only keep putting off its tapering programme," he told Dow Jones Newswires.
Earlier Friday, data showed China's economy expanded 7.8 percent in the July-September quarter from a year earlier, but the upbeat figures failed to give much boost to the Tokyo market.
In currency trading, the dollar was at 97.92 yen, little change from late in New York and well below the mid-98 yen range in Tokyo earlier Thursday. A strengthening yen tends to weigh on shares of Japanese exporters.
Automakers ended lower with Toyota sliding 0.95 percent to 6,280 yen and Honda down 0.25 percent at 3,940 yen.
Sony was off 0.41 percent at 1,930 yen while banking giant Mitsubishi UFJ edged up 0.16 percent to 638 yen.
Shiseido lost early gains to finish 0.11 percent lower at 1,753 yen after saying L'Oreal offered to pay about $315 million for a pair of French-based cosmetics businesses owned by the Japanese make-up firm. (AFP)
