Tokyo shares closed lower Friday as oil-linked firms were hit by a drop in crude prices, with investors eyeing central bank meetings in the US and Japan next week. The strong yen and Britain's possible exit from the European Union also weighed on the Japanese market. "Ahead of the Fed and BoJ next week, and the vote on (Britain's EU membership) the week after, no one wants to take risks today," Juichi Wako, a senior strategist at Nomura Holdings, told Bloomberg News.
The Nikkei 225 index fell 0.40 percent, or 67.05 points, to 16,601.36 at the close. It was down 0.25 percent over the week. The Topix index of all first section shares fell 0.50 percent, or 6.69 points, to 1,330.72, giving up 0.49 percent since last Friday. After the closing bell, messaging app Line said it would list in Tokyo and New York next month in an initial public offering that would value the firm at about $5.5 billion. Trading volume at the Tokyo Stock Exchange has been thin this week as many investors stick to the sidelines ahead of the Fed meeting, which wraps up Wednesday.
Investors are hoping both the Fed and Bank of Japan give some insight to their plans for monetary policy, including US interest rates and possible Japanese economic stimulus. Britain's June 23 vote on whether to remain in the EU is also high on the agenda as some polls show the "Leave" camp ahead. There are fears an decision to exit the bloc could cause volatility across global markets.
The yen gained as investors shifted into safer investments with the dollar at 106.98 yen, down from 107.10 yen Thursday in New York. And Japan's benchmark 10-year bond yield to a record low of minus 0.155 percent, joining a rally in US and European debt. Bond prices and yields move in opposite directions. Banking giant Mitsubishi UFJ was 0.27 percent higher at 527.6 yen, while industrial robot maker Fanuc dropped 0.48 percent to 16,730 yen.
Toyota rose 0.43 percent to 5,627 yen while Uniqlo operator Fast Retailing, a market heavyweight, was down 0.42 percent at 29,815 yen. Energy stocks tumbled as oil prices retreated from 11-month highs, with explorer Inpex slumping 2.91 percent to 884 yen and refiner JX Holdings 2.92 percent off at 432 yen.