Japan's Nikkei average slipped 0.44 percent in slow trade on Friday as investors took profits in Canon Inc and other recent gainers following a six-day winning streak. Fast Retailing Co gave up early gains to finish down 1.1 percent.
The clothing retailer launched an unsolicited bid to acquire Barneys New York Inc for $900 million, topping an existing deal for the upscale clothing chain.
Market participants were largely holding back from trade due to the weekend and corporate earnings results due in coming weeks, making it easy to take profits in recent gainers. "The sectors that have driven the market as of late - steel stocks and real estate - have lost their momentum," said Soichiro Monji, chief strategist at the equity management department of Daiwa SB Investments. "Sectors such as machinery look overpriced," he said.
The benchmark Nikkei finished down 80.54 points at 18,140.94, ending lower for the first time in seven sessions. The broader TOPIX index lost 0.47 percent to 1,779.67. Volume was thin, with just 1.68 billion shares changing hands on the Tokyo exchange's first section. Decliners beat advancers by a ratio of three to one.
Canon fell 1.1 percent to 7,200 yen. The maker of cameras and copiers had edged up 1.4 percent over the last five sessions. Suzuki Motor Corp fell 1.6 percent after putting on 8.5 percent during the previous five sessions. The company's Indian unit, Maruti Udyog Ltd, said it would be hard to match its record domestic sales of 2006/07 because of growing competition and the impact of higher interest rates on consumer spending.
A senior official at Maruti, which accounts for about half of India's car market, said the carmaker would offer discounts and other incentives to offset the impact of higher interest rates. India is Suzuki's single biggest market.
Investors will be doubly cautious next week before the Bank of Japan's two-day policy meeting ends on Thursday. Although participants said they do not expect a rate rise following this meeting, investors will likely want to wait to see the outcome. "The market looks like it is ready to take a breather," said Ken Masuda, a senior equities dealer at Shinko Securities.
Investors would likely be cautious before the BoJ meeting, he said. Shares of Bull-Dog Sauce Co Ltd were untraded on the Tokyo exchange's second section, hit with a flood of sell orders at 1,125 yen, a discount of 15 percent to Thursday's closing price.
Investors are concerned the Tokyo High Court will strike down an appeal by US hedge fund Steel Partners to block the sauce maker's anti-take-over defence plan. The plan, commonly known as a poison pill, would enable Bull-Dog to issue share warrants to dilute the hedge fund's stake and make a take-over more difficult.
Shares of Seiko Epson Corp surged 5.7 percent to 4,090 yen after Goldman Sachs raised its rating on the electronics company to "buy" from "neutral", added it to its "conviction buy" list, and raised its target price by 1,000 yen to 4,400 yen. Analyst Shin Horie said in a July 5 report that the ink-jet printer environment has survived the worst and cellphone liquid crystal display volumes were strong.