TOKYO: Japanese stocks fell 0.77 percent Thursday ahead of a three-day weekend as investors remained wary over the eurozone debt crisis despite action by the European Central Bank to provide cheap loans to banks.
The Nikkei index at the Tokyo Stock Exchange lost 64.82 points to close at 8,395.16. The Topix index of all first section shares fell 0.35 percent or 2.56 points to 723.12.
A total of 523 banks took a record 489.2 billion euros ($641 billion) on which the ECB will charge annual interest of just one percent over three years.
Until now, the ECB has lent for a maximum of one year and the new arrangement is part of a series of unprecedented measures to keep credit flowing in Europe at a time when banks are increasingly wary of lending to each other due to the debt crisis.
But Naoteru Teraoka, general manager in the investment management department at Chuo Mitsui Asset Management, said Japanese stocks will lack overt outside catalysts until at least Tuesday, as US stocks will be on break through Monday.
Japanese markets will be closed on Friday for a national holiday.
"In the absence of specific sector data or news, shippers are still benefiting from being so deeply oversold earlier this year," Teraoka told Dow Jones Newswires.
US stocks were mixed overnight after Tuesday's strong gains, with the Nasdaq dragged lower on poor earnings from tech giant Oracle, while other indexes found little direction in holiday-thinned trade.
By the close the Dow Jones Industrial Average reached 12,107.74 points, up just 4.16 points or 0.03 percent. The S&P 500 was up 0.19 percent, or 2.42 points to 1,243.72.
The Nasdaq was down 25.76 points or 0.99 percent to 2,577.97.
The euro stood at $1.3053, down from $1.3188 in New York Wednesday, and at 101.98 yen, compared with 101.88 yen in New York.
The dollar was at 78.04 yen, almost unchanged from 78.05.
Embattled Tokyo Electric Power Co rose 5.21 percent to 222 yen after the company said it plans to raise electricity rates for factories and office buildings.
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