TOKYO: Tokyo stocks ended mixed Tuesday, with the headline index losing 0.40 percent as investors digested news that US lawmakers had failed to agree on a debt-slashing deal.
The Nikkei 225 index at the Tokyo Stock Exchange, which closed at its lowest level since March 2009 on Monday, lost a further 33.53 points to 8,314.74.
However, the Topix index of all first-section issues added 0.10 percent or 0.71 points to 717.79, ahead of a Japanese national holiday on Wednesday.
The Nikkei stayed under pressure after a US Congress "supercommittee" failed to reach a deal to rein in the nation's huge deficit, driving down Wall Street shares.
But Tokyo stocks rebounded from earlier lows, Daiwa Securities senior market analyst Yumi Nishimura said, adding the committee's failure had already been priced in on Monday.
Hirochi Nishi, general manager at the equity division at SMBC Nikko Securities, said "the market is looking quite oversold on a fundamental valuation basis".
"But participation levels are low considering the prevailing external uncertainties and ahead of Japan's national holiday," he said.
Nishimura of Daiwa also said that "some concerns receded over a potential US rating downgrade after comments from rating firms".
Moody's confirmed its AAA rating on the United States while Standard & Poor's said its ratings would not change because of federal lawmakers' latest failure.
Fitch said it would wait until the end of the month to make its review of the US sovereign rating.
Shares in scandal-hit Olympus closed up 19.86 percent at 869 yen ahead of a visit to Japan by former chief executive Michael Woodford, where he will meet the board of directors that fired him in mid-October.
Olympus shares have gained in recent sessions but are still around 65 percent below their closing price on October 13, the day before Woodford was ousted in a move that brought attention to a series of controversial deals.
The company later admitted to using fees from the deals to help cover up investment losses dating back to the 1990s.
Exporter shares rose as the yen eased against the dollar.
Honda gained 1.95 percent to 2,195 yen and Sony was up 3.08 percent at 1,305 yen.
The dollar firmed to 77.07 yen in Tokyo afternoon trade from 76.92 yen in New York late Monday. The euro bought $1.3484 and 103.91 yen, compared with $1.3494 and 103.83 yen in New York.
Daio Paper jumped 7.06 percent to 546 yen as prosecutors arrested the grandson of its founder after he allegedly spent millions of dollars of group company cash at foreign casinos.
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