The Japanese stock market slipped into negative territory on Friday after opening higher led by resource stocks, as weaker-than-expected economic data from the U.S. and the yen's rise against the U.S. dollar weighed on investor sentiment. Investors also turned cautious following weak corporate earnings.
In late morning trades, the benchmark Nikkei 225 Index is down 4.12 points or 0.05 percent to 8,845.35. The index, which opened higher at 8851.02, is trading in a narrow, 10-point range around Thursday's close of 8849.70.
In the automobile sector, Toyota Motor is down 0.24 percent, Honda Motor is losing 0.58 percent, Suzuki Motor is trading lower by 0.17 percent and Mazda Motor is declining 1.50 percent.
In the banking space, Mitsubishi UFJ Financial is down 0.56 percent, Bank of Yokohama is losing 0.83 percent and Mizuho Financial is trading unchanged.
Among tech stocks, Sony Corp. is losing 1.12 percent and Advantest Corp. is declining 2.14 percent, while Canon is up 0.29 percent.
Hitachi Construction Machinery Co. is trading higher by 0.07 percent. The company on Thursday cut its operating profit for the fiscal year to March by 5 billion yen to 60 billion yen.
Consumer electronics maker NEC Corp. is trading lower by 7.14 percent. The company said Thursday that it plans to cut 5,000 jobs, or about 4 percent of its workforce and also plans to focus on the corporate IT business, while working to cut costs.
Brokerage houses were trading lower after the Nikkei business daily reported that the Financial Services Agency will consider introducing tighter regulations for mutual funds. Nomura Holdings is down 1.07 percent and Daiwa Securities Group is declining 1.43 percent.
On the economic front, the Ministry of Economy, Trade and Industry said Friday that retail sales in Japan rose 2.5 percent on year in December to 13.049 trillion yen. That beat forecasts for an increase of 2.1 percent following the upwardly revised 2.0 percent decline in November.
For the fourth quarter of 2011, retail sales added 0.8 percent on year to 35.003 trillion yen, while large retail sales shed 1.3 percent on year to 5.333 trillion yen. For all of 2011, retail sales fell an annual 1.2 percent to 134.043 trillion yen, while large retailer sales lost 1.8 percent on year to 19.593 trillion yen.
The Ministry of Internal Affairs and Communications said that core consumer prices in Japan were down 0.1 percent on year in December, in line with forecasts following the 0.2 percent contraction in November. Overall CPI came in at -0.2 percent on year, also matching expectations after showing a 0.5 percent fall in the previous month. On month, core CPI and overall CPI were both flat.
In the currency market, the U.S. dollar was trading in the lower 77 yen range on Friday. In early trades, the dollar was quoted in a range of 77.34 to 77.36 yen, down 0.19 yen from Thursday's close of 77.53-77.55 yen in Tokyo.
On Wall Street, stocks turned lower over the course of the trading day on Thursday as disappointing housing data offset early buying interest, Profit taking following recent strength also contributed to the downturn by the markets.
The Dow edged down 22.33 points or 0.2 percent to 12,734.63, the Nasdaq fell 13.03 points or 0.5 percent to 2,805.28 and the S&P 500 slid 7.60 points or 0.6 percent to 1,318.45.
European stocks clawed back to the upside on Thursday after seeing modest losses earlier in the week, bolstered by the Federal Reserve's signal that it will keep interest rates low through 2014.
The German DAX Index rose 1.82 percent, the U.K.'s FTSE 100 Index gained 1.22 percent and the French CAC 40 Index rose 1.53 percent. The Swiss Market Index was up a more modest 0.28 percent.
U.S. crude oil futures closed higher on Thursday, extending gains for a second straight day mostly on a weak dollar and some mixed economic data from the U.S. Light sweet crude for March delivery rose $0.30 or 0.3 percent to settle at $99.70 a barrel on the New York Mercantile Exchange.
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