Tokyo stocks ended almost flat Wednesday as caution ahead of U.S. inflation data, due out later in the day, erased earlier gains led by the technology sector and companies that announced share buyback plans.
The 225-issue Nikkei Stock Average ended up 29.67 points, or 0.08 percent, from Tuesday at 38,385.73. The broader Topix index finished 0.07 point lower at 2,730.88.
On the top-tier Prime Market, gainers were led by precision instrument, rubber product, and electric appliance shares. The main decliners were oil and coal product, real estate, and land transportation issues.
The U.S. dollar was muted in the lower 156 yen zone as a wait-and-see mood prevailed ahead of the release of U.S. consumer price index data for April, dealers said.
Stocks rose from the outset as investors took cues from rises on Wall Street to snap up heavyweight semiconductor and other technology stocks on hopes for growth in the sector after OpenAI and Google LLC released new generative artificial intelligence models, analysts said.
Japanese companies that announced Tuesday plans to enhance shareholder returns, including Sony Group and department store operator Isetan Mitsukoshi Holdings, also drew buying, but the market later succumbed to downward pressure as caution took hold ahead of the key U.S. inflation data, analysts said.
"If U.S. markets reacts very negatively to the CPI data tonight, it will likely affect the Japanese market as well," said Tomoichiro Kubota, senior market analyst at Matsui Securities Co.
Speculation that the Bank of Japan could tighten its monetary policy has also continued to dampen sentiment, as the move would raise borrowing costs for companies, Kubota added.
