The Nikkei average nudged down 0.04 percent on Friday as investors took profits in recent gainers such as Toshiba Corp, although trade was relatively slow ahead of a closely watched US jobs report.
The jobs data is seen as a gauge of the health of the US economy, a key market for Japanese exports, and also provides a clue to the outlook for US interest rates and the dollar. A fall in the yen has been one factor driving shares of Japanese exporters higher in recent weeks.
"The market is basically mirroring lacklustre price movements in the US yesterday ahead of the jobs report there," said Yumi Nishimura, manager at Daiwa Securities SMBC's investment advisory section.
Still, the Tokyo market responded strongly to company-specific news, with Asahi Tec Corp surging almost 22 percent on expectations the auto parts manufacturer will buy a US rival, a move it confirmed after trade ended for the day. The Nikkei ended down 6.51 points at 16,134.25, off 46 points from a three-month closing high marked on August 22.
For the week, the average added 1.23 percent. The broader TOPIX index finished the day down 0.07 percent at 1,633.35. Shares in Toshiba, the world's No 2 maker of NAND flash memory chips used in portable electronic devices, fell 1 percent to 828 yen. They hit a five-year closing high on Thursday.
Trade was comparatively thin with 1.50 billion shares changing hands on the Tokyo exchange's first section against last week's daily average of 1.55 billion shares. Declining issues outnumbered advancers by 896 to 662.
Asahi Tec soared 21.8 percent to 313 yen. The company will hold a news conference to brief on its plan to acquire unlisted US rival Metaldyne Corp later on Friday. Shares of other auto parts makers followed Asahi Tech shares higher as the company's plan raised prospects for similar moves in an industry that has struggled in recent years due to demand for price reductions from auto makers.
U-Shin Ltd climbed 10.5 percent to 919 yen and Keihin Corp gained 5.4 percent to 2,620 yen. Koichi Takatsuka, a senior fund manager at United Investments Co, said a risk-averse investment stance around the globe earlier this year had made investors focus only on large-cap Japanese shares, but that was being corrected.
Among decliners, Bridgestone Corp, Japan's biggest tire maker, fell 1.4 percent to 2,465 yen. On Thursday the shares hit their highest close since May, helped by growing earnings optimism after a fall in rubber prices.
Shares of chemical maker Nitto Denko Corp slid 5.1 percent to 8,000 yen after Goldman Sachs said in a note to clients on Thursday that the stock is likely to suffer in the near term on a weak liquid crystal display (LCD) film rebound.