Tokyo stocks closed flat on Tuesday as firms such as Pioneer Corp fell on poor earnings, cancelling out gains in raw material producers after Chuetsu Pulp & Paper Co announced a merger with a rival firm. Pioneer tumbled after it joined a list of technology firms suffering from intensifying price competition and lower margins. But Sharp Corp said after the closing bell that its quarterly profit rose and left its full-year outlook unchanged.
Yamanouchi Pharmaceutical Co Ltd, however, posted a 30 percent fall in third-quarter net profit after the close due to merger charges ahead of its integration with Fujisawa Pharmaceutical
The Nikkei average closed down 0.03 percent at 11,384.40 and the broader TOPIX index rose 0.03 percent to 1,146.49.
After the weekend election in Iraq ended with relatively little major violence, analysts said market players were now seeking fresh trading clues from the US economic outlook.
The US Federal Open Market Committee (FOMC) is widely expected to raise official rates by a quarter-percentage point to 2.50 percent when it concludes its two-day meeting on Wednesday.
"For the Tokyo market to move higher, we need tech stocks to bounce back from recent weakness. But for that, we need a positive lead from Wall Street ... and that'll all depend on the FOMC's statement (after the rate decision)," said Yasuo Ueki, a market analyst at consultancy Poko Financial Office.
Pioneer lost 2.9 percent to 1,860 yen. The company revised down its earnings for the second time in three months, this time projecting a full-year loss due to price falls and weak margins in plasma display panels, DVD recorders and DVD drives.
Rival Victor Co of Japan Ltd dropped 1.8 percent to 866 yen and Matsushita Electric Industrial Co Ltd slipped 0.1 percent to 1,536 yen.
Sharp, the world's top maker of LCD TVs, posted an 11.4 percent rise in quarterly profit on strong sales of liquid crystal displays (LCDs) and mobile phones and left its full-year outlook unchanged.
Prior to the announcement, Sharp's shares closed up 0.6 percent at 1,597.
Akio Yoshino, an economist at Societe Generale Asset Management, is one of many analysts who disfavour Japanese technology stocks due to high inventory levels at those companies.
Among the day's winners, Chuetsu Pulp leaped 14.3 percent to 312 yen after the medium-sized paper manufacturer and Mitsubishi Paper Mills Ltd said on Monday they had agreed to merge on October 1 to bolster competitiveness amid intensifying competition among paper makers around the world.
Mitsubishi Paper's shares rose 2.5 percent to 162 yen.
Shares of Bridgestone Corp, which on Monday lifted its year-end dividend forecast to 11 yen from eight yen, gained 1.5 percent to 2,065 yen.
Yamanouchi closed up 0.8 percent at 3,800 yen. Japan's third-biggest drug maker, 42.5 percent owned by foreign investors, kept its target for a net profit of 35.5 billion yen ($342.6 million) for the year to March 31, versus 60 billion yen a year earlier, though analysts polled by Reuters Estimates forecast 37.2 billion yen. Trade was active, with 1.74 billion shares changing hands on the first section, the highest total since January 18. Decliners outnumbered gainers 777 to 673.