Tokyo stocks were mostly flat Tuesday morning as buying of export-oriented issues on the back of the yen's weakness against the U.S. dollar was capped amid caution ahead of U.S. inflation data due later in the week.
The 225-issue Nikkei Stock Average rose 19.64 points, or 0.05 percent, from Monday to 38,199.10. The broader Topix index was down 1.14 points, or 0.04 percent, at 2,722.94.
The dollar rose to the mid-156 yen level in Tokyo on persistent speculation that U.S. interest rates will remain elevated for longer after the New York Federal Reserve said Monday that consumer inflation expectations for the year ahead rose in April from a month earlier.
At noon, the U.S. dollar fetched 156.42-47 yen compared with 156.19-29 yen in New York and 155.88-89 yen in Tokyo at 5 p.m. Monday.
The euro was quoted at $1.0786-0787 and 168.71-78 yen against $1.0785-0795 and 168.49-59 yen in New York, and $1.0775-0776 and 167.97-168.01 yen in Tokyo late Monday afternoon.
The yield on Japan's benchmark 10-year government bond briefly rose 0.030 percentage point from Monday's close to a fresh six-month high of 0.965 percent, as the debt continued to be sold after the Bank of Japan reduced its purchase of Japanese government bonds in its regular operation the previous day.
Stocks were higher from the outset, boosted by the weak yen and semiconductor-related shares that tracked advances by their U.S. counterparts overnight, including chip giant Nvidia Corp., analysts said.
But the overall market remained top-heavy amid a dearth of fresh trading cues, while investors were also wary of rising long-term interest rates in Japan, said Kazuo Kamitani, a strategist in the Investment Content Department at Nomura Securities Co.
"The market is likely to remain cautious ahead of the U.S. consumer price index release (on Wednesday), resulting in the Nikkei trading within a narrow range today and tomorrow," said Kamitani.
