TOKYO: Tokyo stocks ended Tuesday's session mixed on the back of profit-taking and weighed by a stronger yen as investors await a deal between lawmakers in the United States on avoiding a fiscal cliff.
The Nikkei 225 index at the Tokyo Stock Exchange lost 0.27 percent, or 25.72 points, to 9,432.46, while the broader Topix index of all first-section shares was flat, adding 0.03 percent, or 0.24 points, to 781.97.
Investor sentiment was dampened after the Institute for Supply Management said Monday its closely-watched index on US manufacturing activity for November fell into contraction after two months of expansion.
Businesses surveyed by the ISM blamed the slow global economy and uncertainty over gridlocked talks in Washington over agreeing on a plan to avoid the fiscal cliff of tax hikes and spending cuts that will likely tip the economy into recession.
Tatsunori Kawai, chief strategist at kabu.com Securities, said investors had largely priced in hopes for further Bank of Japan easing measures after the December 16 general election, which is widely expected to see main opposition leader Shinzo Abe become the country's next prime minister.
Abe has repeatedly said he would pressure the central bank for more aggressive monetary easing measures to boost the world's third-largest economy.
"The market is in line for a bout of profit-taking but should soon stabilise after the initial selling wave," Hiroichi Nishi, general manager of equities at SMBC Nikko Securities, told Dow Jones Newswires.
In Tokyo stock trading, Sharp rose 1.16 percent to 174 yen after reports that US chipmaker Qualcomm was set to buy about five percent of the company for $122 million.
Canon was down 0.91 percent at 2,934 yen, while Sony was off 0.50 percent to 793 yen and Toyota slipped 0.14 percent to 3,510 yen.
Fast Retailing, operator of the Uniqlo cheap chic clothing chain, fell 1.68 percent to 18,690 yen after jumping Monday on news the Japanese firm was buying about 80 percent of US apparel maker J Brand Holdings.
In forex trading, the euro bought $1.3067 and 107.23 yen in Tokyo, from $1.3051 and 107.36 yen in New York late Monday, while the dollar weakened to 82.07 yen from 82.24 yen.
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