The Nikkei stock average edged down 0.1 percent on Thursday, extending its longest losing streak this year to a sixth session as lower oil prices dented trading houses such as Mitsubishi Corp.
Trade was lacklustre ahead of a flood of economic data as growing uncertainty about the global economy thinned the market, although defensive shares such as pharmaceuticals stood firm as investors sought safety.
Among other gainers was Sony Corp which said after the close that it would double sales in BRIC countries to 2 trillion yen by the year ending in March 2011. The benchmark Nikkei shed just 7.6 points after a volatile day that saw it move in and out of positive territory before finishing at 13,822.32. The broader Topix lost 0.1 percent to 1,344.79.
Tokyo shares reacted little to the US Federal Reserve's decision to keep interest rates steady on Wednesday and signal it was in no hurry to raise them, even as the central bank voiced greater concern about inflation.
"The FOMC meeting is over and nothing was really solved. The lack of clearness about policy made the uncertainty about the overseas economy worse than it already was," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
"They've adopted a wait-and-see stance, so of course the market will too, especially with all the economic data coming up." Japanese consumer prices, jobs and industrial output data are due out on Friday morning, and its tankan survey of business sentiment on July 1, the same day as US jobs data.
"There's a lot of scary things staring us in the face, and that's making trade thin," said Tomomi Yamashita, a fund manager at Shinkin Asset Management.
"People want to buy, but they're afraid the market's going to fall again." Shares of electricity wholesaler Electric Power Development Co (J-Power) fell 6.9 percent to 3,810 yen after its shareholders rejected several proposals by British activist investor the Children's Investment Fund (TCI) including one for a higher dividend.
Pharmaceuticals such as Eisai Co Ltd gained as investors turned defensive in the face of uncertainty, with such companies among the largest positive contributors to the Nikkei 225 by volume weight. Eisai rose 3.3 percent to 3,780 yen, with Astellas Pharma Inc gaining 2 percent to 4,620 yen and Chugai Pharmaceutical Co Ltd rising 4.7 percent to 1,750 yen.
Otherwise activity was largely limited to trading on factors specific to each company, including buying back of shares that had been heavily sold in recent days, such as Sony.
Sony gained 2.9 percent to 5,060 yen. Oil settled down $2.45 on Wednesday and fell to just below $134 a barrel on Thursday dragging down resource-linked firms such as trading houses. Mitsubishi lost 2.6 percent to 3,420 yen while fellow trader Itochu Corp shed 2.5 percent to 1,141 yen, and Marubeni Corp slid 2.2 percent to 887 yen.
Nomura Holdings Inc Japan's largest brokerage, slid 1 percent after sources familiar with the matter said Japan's financial watchdog plans to order the company to improve internal controls after it become embroiled in an insider trading scandal. Trade was light, with 1.82 billion shares changing hands, compared with last week's daily average of 1.94 billion. Declining shares beat advancing ones by 930 to 682.