The Nikkei 225 index at the Tokyo Stock Exchange edged down 0.09 percent or 8.25 points to 8,841.22. The Topix index of all first-section issues lost 0.46 percent or 3.48 points to 761.13.
Shares stayed rangebound following declines in US stocks Thursday on data including weaker-than-expected December home sales.
Dealers said investors stepped aside as they looked to the EU summit meeting on Monday.
Okasan Online Securities chief strategist Yoshihiro Ito said position-squaring ahead of the weekend was also keeping the index down, while noting that strong dip-buying limited overall losses.
"Extreme optimism has now faded," Chibagin Asset Management strategist Yoshihiro Okumura said, adding that the wait-and-see market mood had intensified ahead of forthcoming earnings releases.
Investors were also awaiting US economic growth numbers for the final three months of 2011, which will be released later Friday.
KDDI was one of the heaviest-weighted gainers, closing 1.54 percent higher to 494,500 yen after announcing late Thursday its sales and profits grew in the nine months to December following its introduction of the iPhone.
Strong sales of Apple's popular gadget and other smartphones allowed the carrier to increase its full-year revenue target.
But Nintendo and NEC fell sharply after announcing net losses.
Nintendo tumbled 4.09 percent to 10,310 yen, after at one point falling below 10,000 yen for the first time since 2004. Electronics giant NEC plunged 7.14 percent to 156 yen.
Nippon Steel, which will become the world's second-largest steel maker later this year after a merger with a smaller domestic rival, was down 3.48 percent at 194 yen after downgrading its full-year profit forecast to break-even.
On Thursday the Dow Jones Industrial Average closed down 0.18 percent at 12,734.63 while the tech-rich Nasdaq Composite dropped 0.46 percent to 2,805.28.