Japanese stocks ended down on Friday with investors taking a breather from recent rallies and locking in profits on retailers' shares such as Ito-Yokado Co and other high-flyers ahead of the weekend.
Exporters too came under pressure due to the recent appreciation of the yen against the dollar, but investors retained a bullish outlook on the Japanese economy and were keen to buy stocks on dips, limiting the market's retreat.
The Nikkei average closed down 0.57 percent at 11,418.51. On Thursday it reached an intraday high of 11,647.71, its strongest since June 2002.
The broader TOPIX index dipped 0.67 percent to 1,138.09.
Retail shares were among the main targets of profit-takers after the retail sector sub-index IRETL.
Hit 782.23 on Thursday, its highest level since June 2002.
Ito-Yokado, Asia's largest retailer by sales, fell 4.18 percent to 4,590 yen while Asia's number two, Aeon Co, lost 2.88 percent to 4,390 yen.
Bank shares, in particular those of regional banks fell after on Thursday's hefty gains. Bank of Yokohama Ltd gave up 5.18 percent to 567 yen after jumping 9.7 percent on Thursday.
Toyota Motor Corp slipped 1.05 percent to 3,760 yen and Nissan Motor Co declined 1.25 percent to 1,183 yen as the dollar crawled back to around 107.10 yen after a two-yen plunge on Thursday to 106.35 yen, its lowest level in a month.
Yen worries weighed on blue chip issues like Canon Inc, which sagged 1.7 percent to 5,190, and Sony Corp, which fell 2.06 percent to 4,270.
On the telecoms front, NTT DoCoMo Inc, Japan's largest mobile operator, down 2.63 percent at 222,000 yen after a source at Japan's dominant mobile phone operator told Reuters on Thursday it was in detailed discussions with Hong Kong conglomerate Hutchison Whampoa Ltd to pull out of their third-generation phone venture in Britain.
Number two KDDI Corp also shed 1.25 percent to 551,000 with concerns about growing competition lingering in the market.
Trade volume is likely to fall, he added, as the end of Japan's financial year on March 31 draws nearer and investors want to finalise numbers on their books.
Decliners outnumbered advancers 875 to 573. Trade volume on the first section fell to 1.370 billion shares, the lowest since February 27 and about a half of Thursday's volume of 2.104 billion shares.
Elsewhere, Shinsei Bank, Japan's first foreign-owned lender, rose 1.97 percent to 882 yen, while Sky Perfect Communications Inc, Japan's largest pay TV satellite broadcaster, edged up 0.63 percent to 160,000 ahead of their inclusion in the TOPIX index on Monday.
Their shares will be reflected on the TOPIX based on Friday's closing prices.
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