Japan's Nikkei average slipped 0.7 percent on Friday, hurt by selling that followed the settlement of futures and options and by concerns over a stronger yen that pushed automakers like Toyota Motor Corp lower.
Japan's gross domestic product grew a revised 0.6 percent in the second quarter, below market expectations for a 0.9 percent expansion, which was the same as the government's preliminary estimate issued last month. But market players said it was not having a significant impact.
"I wouldn't say the GDP data is completely unconnected to the Nikkei's dip, but mainly this is due to the yen's advance, which is quite a negative factor if you think about company earnings," said Masayoshi Okamoto, head of dealing at Jujiya Securities.
The dollar hit a seven-month low just below 91.00 yen. After trimming some losses, the dollar stood at 91.15 yen, down 0.6 percent on the day.
Since late August the yen has been above levels expected by major manufacturers for the current financial year. Investors worry about a stronger yen since it eats into exporters' earnings when repatriated.
Okamoto said the Nikkei was pushed lower by selling connected with Friday's settlement of Nikkei futures and options, adding that a late jump in the benchmark on Thursday had been a move to push up prices in preparation for this.
The benchmark Nikkei shed 69.34 points to 10,444.33 after rising 2 percent on Thursday, its biggest one-day percentage gain in two weeks. The broader Topix lost 0.8 percent to 950.41.
"There seems to be some exhaustion after share prices were pushed higher yesterday almost forcibly," said Hideyuki Ishiguro, supervisor at Okasan Securities' investment strategy department.
Turnover on the Tokyo exchange's first section jumped to 2.2 trillion yen ($24 billion), the highest since June 12, the last time settlement of Nikkei futures and options took place, when turnover was nearly 3 trillion yen..
Nikkei futures and options contracts expiring in September likely settled at 10,541.92, Tokyo market participants said on Friday, citing estimates by local brokerages.
Market players said some investors appeared to be wary in the wake of five straight days of gains on Wall Street.
"U.S. shares may have hit a short-term peak, so it's entirely possible there may now be a brief correction — and this would weigh on Japanese shares," said Yutaka Miura, senior technical analyst at Mizuho Securities.
But others said that recent gains by global share markets showed that overall sentiment is improving, and that this will keep the Nikkei supported.
MIXED EXPORTERS
Automakers were weak, with Toyota losing 1.8 percent to 3,840 yen and Honda Motor Co down 2.1 percent at 2,865 yen.
Honda will limit auto production in Japan to 1 million cars and shift more production overseas to rein in costs, Japan's Asahi daily said on Friday, citing an interview with Honda President Takanobu Ito.
But some tech exporters edged higher, with Sony Corp up 0.6 percent at 2,485 yen after U.S. chip companies Texas Instruments and ASML both boosted their sales outlooks, a signal that consumers are spending cash on personal technology.
Tokyo Electron rose 0.8 percent to 5,270 yen.
Shares of talent agency Yoshimoto Kogyo Co Ltd surged 3.8 percent to 1,341 yen after two sources familiar with the matter said the company plans to go private. The company announced the plans after the market close.
Trade was active, with 2.8 billion shares changing hands on the Tokyo exchange's first section, up from last week's daily average of 1.9 billion.
Declining shares outnumbered advancing ones by more than 3 to 1.
