Japanese shares ended mixed on Thursday after a day in which the yen's strength capped gains while investors' appetite for firms with solid prospects supported the market.
Retail and other domestic-oriented shares drew buying, with first-section turnover reaching more than 1.2 trillion yen ($10.96 billion).
"Investors are refraining from exporters right now, but there is so much activity in domestic-oriented shares and it's not easy to sell in general," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co Ltd.
The Nikkei average .N225 fell 0.10 percent to end at 10,531.44, after rising as high as 10,598.96 in the afternoon.
The broader TOPIX index .TOPX managed to hold onto gains, edging up 0.26 percent to 1,057.54.
The yen's sudden rise in late morning took a toll on some exporters, such as Canon Inc 7751.T and Toyota Motor Corp 7203.T , forcing them to give up earlier gains.
Canon ended up only 0.38 percent at 5,250 yen after climbing as high as 5,290 yen, while Toyota inched up 0.6 percent to 3,360 yen after rising as high as 3,430 yen in the morning.
Technology shares also suffered, with Sony Corp 6758.T sagging 0.26 percent to 3,830 yen and Matsushita Electric Industrial Co 6752.T , the world's second-largest consumer electronics maker, down 2.43 percent at 1,368 yen.
"The market has started to discount chances that the yen could rise as high as 105 yen (per dollar)," said Zenshiro Mizuno, senior managing director at Marusan Securities Co Ltd.
But the yen's strength continued to benefit domestic-oriented shares as investors searched for companies relatively sheltered from the effects of a strong yen. Also providing a boost were strong earnings reports from Seven-Eleven Japan Co 8183.T and parent company Ito-Yokado Co Ltd 8264.T , which helped trigger buying of retailers' shares.
Trading volume slowed, with 1.15 billion shares changing hands on the first section, compared with 1.32 billion on Wednesday. Decliners outpaced advancers 802 to 579.
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Ito-Yokado, Asia's biggest retail group, rose 3.78 percent to 4,120 yen after posting a group net profit of 23.24 billion yen for the half year to August, better than its August forecast of a 13 billion yen profit.
Seven-Eleven Japan, which climbed 2.74 percent to 3,750 yen, earned 49.99 billion yen in group net profit for March-August, beating its March forecast of 47.2 billion yen.
While attention has been focused on non-exporters that are less vulnerable to the firmer yen, analysts said investors have become picky.
"Investors have become choosy," said Masayoshi Okamoto, head of dealing at Jujiya Securities. "The market may be affected by announcements such as analysts' rating reports."
Mitsubishi Chemical Corp 4010.T , Japan's largest chemical maker, for example, shot up after Goldman Sachs raised its rating to "outperform" from "in-line", saying the company's earnings recovery has been better than the market consensus.
Mitsubishi Chemical closed up 7.14 percent at 285 yen.
Still, Akino of Ichiyoshi Investment Management said some domestic-oriented shares have been overbought and that once the yen's movements settle down, technology shares may see funds begin to flow their way.
One notable tech share that performed well was Seiko Epson Corp 6724.T which ended up 1.69 percent at 3,600 yen.
Shares in the the world's largest home printer maker rose as high as 3,620 yen after Seiko Epson's chief executive told Reuters in an interview on Thursday it may move some laser printer and projector production to Europe from Asia to curb the impact of a strong yen.
Seiko Epson is working on a plan to cut the revenue impact from yen volatility against the euro and could reach a decision next year, CEO and Chairman Hideaki Yasukawa said. ($1=109.51 Yen)
Retail and other domestic-oriented shares drew buying, with first-section turnover reaching more than 1.2 trillion yen ($10.96 billion).
"Investors are refraining from exporters right now, but there is so much activity in domestic-oriented shares and it's not easy to sell in general," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co Ltd.
The Nikkei average .N225 fell 0.10 percent to end at 10,531.44, after rising as high as 10,598.96 in the afternoon.
The broader TOPIX index .TOPX managed to hold onto gains, edging up 0.26 percent to 1,057.54.
The yen's sudden rise in late morning took a toll on some exporters, such as Canon Inc 7751.T and Toyota Motor Corp 7203.T , forcing them to give up earlier gains.
Canon ended up only 0.38 percent at 5,250 yen after climbing as high as 5,290 yen, while Toyota inched up 0.6 percent to 3,360 yen after rising as high as 3,430 yen in the morning.
Technology shares also suffered, with Sony Corp 6758.T sagging 0.26 percent to 3,830 yen and Matsushita Electric Industrial Co 6752.T , the world's second-largest consumer electronics maker, down 2.43 percent at 1,368 yen.
"The market has started to discount chances that the yen could rise as high as 105 yen (per dollar)," said Zenshiro Mizuno, senior managing director at Marusan Securities Co Ltd.
But the yen's strength continued to benefit domestic-oriented shares as investors searched for companies relatively sheltered from the effects of a strong yen. Also providing a boost were strong earnings reports from Seven-Eleven Japan Co 8183.T and parent company Ito-Yokado Co Ltd 8264.T , which helped trigger buying of retailers' shares.
Trading volume slowed, with 1.15 billion shares changing hands on the first section, compared with 1.32 billion on Wednesday. Decliners outpaced advancers 802 to 579.
PICK AND CHOOSE
Ito-Yokado, Asia's biggest retail group, rose 3.78 percent to 4,120 yen after posting a group net profit of 23.24 billion yen for the half year to August, better than its August forecast of a 13 billion yen profit.
Seven-Eleven Japan, which climbed 2.74 percent to 3,750 yen, earned 49.99 billion yen in group net profit for March-August, beating its March forecast of 47.2 billion yen.
While attention has been focused on non-exporters that are less vulnerable to the firmer yen, analysts said investors have become picky.
"Investors have become choosy," said Masayoshi Okamoto, head of dealing at Jujiya Securities. "The market may be affected by announcements such as analysts' rating reports."
Mitsubishi Chemical Corp 4010.T , Japan's largest chemical maker, for example, shot up after Goldman Sachs raised its rating to "outperform" from "in-line", saying the company's earnings recovery has been better than the market consensus.
Mitsubishi Chemical closed up 7.14 percent at 285 yen.
Still, Akino of Ichiyoshi Investment Management said some domestic-oriented shares have been overbought and that once the yen's movements settle down, technology shares may see funds begin to flow their way.
One notable tech share that performed well was Seiko Epson Corp 6724.T which ended up 1.69 percent at 3,600 yen.
Shares in the the world's largest home printer maker rose as high as 3,620 yen after Seiko Epson's chief executive told Reuters in an interview on Thursday it may move some laser printer and projector production to Europe from Asia to curb the impact of a strong yen.
Seiko Epson is working on a plan to cut the revenue impact from yen volatility against the euro and could reach a decision next year, CEO and Chairman Hideaki Yasukawa said. ($1=109.51 Yen)
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