Japan's Nikkei share average ended flat on Friday as a risk-off atmosphere pervaded ahead of a pivotal election in Greece at the weekend, but losses were tempered by an overnight report that central banks were prepared to offset potential market turmoil.
After lowering their exposure to Europe this week, investors zoomed in on domestically driven stocks, with social networking company DeNa Co Ltd soaring 12.3 percent on a share buyback, pulling peer Gree Inc up 8.4 percent.
The Nikkei closed flat at 8,569.32 after dipping in and out of negative territory throughout the day, rounding off a rangebound week marked by thin volumes and low liquidity as investors played it safe ahead of the Greek election on Sunday, which could set the country on a path to exit the eurozone.
"The markets are getting optimistic that Greece will be able to cobble together a coalition that will honour the current debt agreement," said a trader at a foreign bank.
A Bank of Japan decision to stand pat on monetary policy was shrugged off by investors as inaction had been priced into the market, but the Nikkei opened up in the morning after Reuters reported G20 officials saying central banks were ready to prevent a credit squeeze if post-election market turmoil erupts.
"The election result will at least give the market a direction. Even in the worst-case scenario a policy response should come forth to calm the markets," said Hideyuki Ishiguro, assistant manager of investment strategy at Okasan Securities.
Brokerages suffered losses, with Nomura Holdings Daiwa Securities Group both shedding 1.5 percent on Jefferies downgrades, after a Barclay's Capital upgrade for Nomura boosted the sector on Wednesday, leaving it 1.6 percent up on the week.
Domestically driven retailers Fast Retailing Co Inc and Lawson Inc outperformed the market with gains of 1.3 and 1.2 percent, respectively, while some pharmaceuticals, including Astellas Pharma benefited from healthcare system reforms that encourages the use of generic drugs.
Stocks with high European exposure such as Canon Inc, which lost 0.5 percent, and Mazda Motor Corp, which ended flat, were not as affected by last minute nerves ahead of the Greek election.
Sumitomo Heavy Industries slipped 2.2 percent after Deutsche Securities slashed its target price and lowered its operating profit forecast for the present year by 5 percent.
Trading on the first section of the Tokyo Stock Exchange was low at 934 billion yen ($12 billion), having failed to top 1 trillion all week after topping it every day last week.
Average daily volumes on the broader Topix index, which inched up 0.1 percent to 726.57, have dropped 25 percent this week from last week. The Nikkei closed 1.3 percent up on the week, a stronger gain than last week's 0.2 percent rise that snapped a 9-week losing streak, the index's worst run in 20 years. It is still down 16.4 percent from its one-year high, hit on March 27.
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