TOKYO: Tokyo stocks closed 0.54 percent higher on Friday as investors retreated following the previous day's strong rally on joint action by central banks to counter the eurozone crisis.
The benchmark Nikkei index at the Tokyo Stock Exchange rose 46.37 points to 8,643.75. The Topix index of all first-section issues gained 0.56 percent, or 4.13 points, to 744.14.
The muted rise came after Tokyo gained 1.93 percent on Thursday as major Asian markets soared.
"It's time to cool down after a flurry of festivity Thursday," said Kenichi Hirano, operating officer at Tachibana Securities.
Investors took a wait-and-see approach ahead of the US non-farm payrolls data to be released Friday, dealers said.
The euro bought $1.3456 and 104.68 yen in Tokyo afternoon trade, against $1.3461 and 104.56 yen in New York late Thursday. The dollar rose to 77.79 yen from 77.66 yen.
US economic indicators on Thursday sent mixed signals -- weekly jobs market data was worse than expected while US manufacturing activity in November expanded at a faster rate than the previous month.
The market is also watching for hints of progress in efforts to stem the eurozone debt crisis as European Union leaders prepare for talks at a summit in Brussels next week.
"The focus is on whether there is any progress in discussion in the lead up to the European Union summit next week," said Yumi Nishimura, senior market analyst at Daiwa Securities.
Markets got a boost Thursday after six major central banks moved to pump liquidity into the global financial system amid increasing worries over Europe's debt crisis.
"The confidence boost from central bank action came at a right time, but it won't last unless there is follow up from the politicians in getting the eurozone's fiscal house in order," said ANZ Bank senior economist Khoon Goh in Wellington.
French President Nicolas Sarkozy said France and Germany would push to give the European Union a new treaty to restore tough budgetary discipline in the debt-ravaged eurozone.
European Central Bank chief Mario Draghi said the bank would not act as lender of last resort for struggling eurozone countries, but left the door open to other measures if governments agree on budgetary consolidation.
US stock markets closed mostly lower Thursday as investors digested a flood of economic data, a day after major indexes surged more than four percent.
The Dow Jones Industrial Average fell 0.21 percent to 12,020.03 while the tech-heavy Nasdaq Composite rose 0.22 percent to 2,626.20.
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