Nikkei shaves losses to end mostly flat as traders eye U.S. payrolls

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TOKYO, Jan 7 (Reuters) – The Nikkei share average recouped most of its morning losses to end nearly flat on Friday, with investors avoiding making big bets ahead of a key U.S. jobs report and a three-day weekend in Japan.

The Nikkei closed 0.03% lower at 28,478.56, while the broader Topix slipped 0.07%. For the week, the Nikkei dropped 1% after four straight weeks of gains, while the Topix rose about 0.2% in its fifth straight weekly rise.

Semiconductor stocks dragged both indexes lower, with Advantest sliding 0.65% and Tokyo Electron declining 0.14%.

Uniqlo store operator Fast Retailing shed 0.35%.

“It’s a difficult time to take positions, ahead of the U.S. jobs report and a three-day weekend,” said a market participant at a domestic securities firm.

“There isn’t any strong reason to buy stocks today, after U.S. stocks traded sideways overnight,” said a market participant at another domestic securities firm.

The S&P 500 ended 0.1% lower on Thursday, ahead of the U.S. non-farm payrolls due later on Friday, which could strengthen Federal Reserve officials’ resolve for an early and speedy pace of monetary policy normalisation.

Expectations for three quarter-point U.S. rate increases this year have driven Treasury yields to multi-month highs.

That lifted shares of banks and other financial institutions in Japan. Mitsubishi UFJ Financial Group jumped 3.44%.

Energy shares also rose, supported by higher crude oil prices.

SoftBank Group was the Nikkei’s biggest winner by index points, with a 2.18% rally.

The Topix value-share index rose 0.52%, compared with a 0.65% slide in the growth-share index. (Reporting by Tokyo markets team; editing by Uttaresh.V and Subhranshu Sahu)