TOKYO: Tokyo stocks closed down 0.26 percent Friday, as investors gear up for a string of Japanese data next week and a government decision on hiking the nation's consumption tax.
The benchmark Nikkei 225 index gave up 39.05 points to 14,760.07, while the Topix index of all first-section shares lost 0.24 percent, or 2.97 points, to 1,217.52.
Markets are awaiting a decision next week by Prime Minister Shinzo Abe on whether Tokyo will raise the country's 5.0 percent sales tax to 8.0 percent -- a move seen as a crucial to bringing down Japan's huge national debt.
The conservative leader is also expected to offer a series of stimulus measures, including corporate tax cuts and spending programmes, to offset the impact of the tax hike, which some fears will drag on the nation's economic recovery.
Japan's biggest stock market has been weighed down by concerns that shares were overheated after a strong rally in recent weeks, driven by Tokyo's winning bid to host the 2020 Olympics.
The success stoked buying of construction and real-estate firms.
A rising yen also dragged the Tokyo market lower Friday, hitting exporters who benefit when the currency is weak.
The dollar bought 98.63 yen in afternoon Tokyo trade, down from 98.94 yen in New York Thursday afternoon.
Markets were unimpressed with fresh data showing Japanese inflation hit a five-year high last month.
The rise was driven by soaring energy costs, indicating the government's plan to boost prices of everyday goods had not yet gained traction.
The inflation figures "were a net positive for 'Abenomics' subscribers, but they are still not strong or convincing enough to singlehandedly carry stocks", said Tachibana Securities market advisor Kenichi Hirano, referring to the Japanese premier's economic policies.
Investors are also hoping to see clear signs that the Nikkei would keep moving upward, he added.
"Domestic investors await a break through the July high mark first 14,953.29 for confirmation that the Nikkei is ready to break out again," Hirano told Dow Jones Newswires.
The index is up over 40 percent from the start of the year.
In share trading, Lixil Group fell 2.24 percent to 2,052 yen after saying Thursday it would purchase German bathroom-fittings maker Grohe for about 3.06 billion euros or $4.13 billion.
Some analysts questioned the deal's benefits and the impact on Lixil's balance sheet.
Carbon fibre giant Toray Industries gained 1.58 percent to 644 yen after announcing it would buy smaller US rival Zoltek Companies for $584 million.
In other trading, Toyota was down 1.07 percent to 6,440 yen, Sony added 0.23 percent to 2,106 yen while banking giant Mitsubishi UFJ lost 1.37 percent to 644 yen. (AFP)
