Tokyo stocks ended mixed Friday in a tug-of-war between bargain-hunting in bank and other oversold stocks, and selling on weakened sentiment following pullbacks on Wall Street overnight.
The 225-issue Nikkei Stock Average ended down 132.88 points, or 0.34 percent, from Thursday at 38,787.38. The broader Topix index finished 8.08 points, or 0.30 percent, higher at 2,745.62.
On the top-tier Prime Market, gainers were led by bank, electric power and gas, and transportation equipment shares. The main decliners were precision instrument, miscellaneous product, and chemical issues.
The U.S. dollar rose to the upper 155 yen range in Tokyo on prospects of a wider interest rate differential between Japan and the United States after long-term U.S. Treasury yields rose overnight.
The yen was additionally sold after the Bank of Japan said Friday it would not change its regular operation purchase amount of Japanese government bonds after unexpectedly reducing the amount earlier this week.
Stocks started the day weak, taking their cues from falls on Wall Street overnight. All three major U.S. indexes closed lower on concerns over an overheated market after the Dow Jones topped the 40,000 line for the first time, analysts said.
The market, however, found support as investors bought back oversold stocks and sought companies that had recently reported positive earnings results or favorable shareholder returns.
Among such issues, banking shares drew buying after Japan's major financial groups released upbeat earnings and projections on Wednesday.
"There is a significant sense that the market is undervalued at its current levels. The performance of banks, in particular, appears to be relatively strong amid the overall uncertainty about earnings this season," said Makoto Sengoku, senior equity market analyst at the Tokai Tokyo Intelligence Laboratory Co.
