Tokyo stocks edge down

Japan's Nikkei average fell 0.2 percent on Friday, as the announcement of stricter capital rules led Mizuho Financial and other banks to give back some of this week's hefty gains while metal stocks fell as the dollar's strength hit gold prices. Bank shares had surged this week as fears of imminent large-scale equity financing eased after sources said global regulators would give banks a transition period to help them adjust to capital rule changes starting in 2012.
But the Basel Committee of bank regulators said on Thursday that it still wants the changes to take effect by the end of 2012, though they may be postponed if the global economy is still struggling at the time. "The announcement didn't help ease strong concerns about a flood of new bank share issues," said Toshiyuki Kanayama, market analyst at Monex Inc.
"Worry about stock issuance is still keeping the market under pressure." But stocks trimmed losses after the Bank of Japan said it would not tolerate deflation and pledged to keep accommodative monetary conditions, setting the scene for further monetary easing to combat falling prices.
The market also drew support as the yen gave back some of its earlier gains made on rumours of a coup in Pakistan, which were quickly denied, with investors buying back exporters such as TDK Corp. The benchmark Nikkei ended down 21.75 points at 10,142.05, after falling to just above the 10,000 mark. On the week, the Nikkei gained 0.3 percent. The broader Topix shed 0.3 percent to 893.59.
Trade was light as investors were reluctant to take fresh positions with the year-end in sight. On the Tokyo exchange's first section, 1.9 billion shares changed hands, below last week's daily average of 2.2 billion. Declining stocks and advancing ones were almost evenly matched 767 to 745. Japan's top lender, Mitsubishi UFJ Financial Group, slipped 0.4 percent to 462 yen but was still 1.5 percent higher on the week.
Mizuho Financial Group, Japan's second-biggest bank, fell 3.2 percent to 179 yen but remained 12.6 percent higher on the week. Sumitomo Mitsui Financial Group dropped 4.9 percent to 2,840 yen but was up almost 5 percent this week. Resource-linked shares slid after gold prices fell 3 percent the previous session, pressured by the dollar's strength, while world oil prices fell broadly as US unemployment claims rose.
Sumitomo Metal Mining lost 3.1 percent to 1,363 yen, Mitsubishi Materials Corp shed 1.8 percent to 217 yen and Dowa Holdings fell 1 percent to 499 yen. Mitsui O.S.K. Lines Ltd rose 1.5 percent to 479 yen after the shipping firm said it did not have immediate plans to issue new shares and would continue to rely on bank borrowing and straight bonds for its financing needs.
"Investors are afraid that firms could issue new shares in February and March," said Fujio Ando, senior managing director of Chibagin Asset Management. "Issuing new shares would hurt companies' attractiveness in general as the profits they are making now are not enough to make up for (any dilution of shares)."
Eisai Co Ltd fell 1.2 percent to 3,380 yen after the drugmaker cut its annual net profit forecast by about one-third due to its planned acquisition of US drug firm AkaRx Inc for $255 million. Electronics component maker and TDK climbed 1.1 percent to 5,450 yen, after sliding as far as 5,290 yen.