Tokyo: Nikkei ends flat; tech gains offset weakness in financials

[TOKYO] Japanese stocks ended flat on Thursday, as gains in tech shares offset weakness in financial stocks after US yields slipped on Federal Reserve Chair Janet Yellen's comments.

The Nikkei closed 0.01 per cent higher at 20,099.81, while the broader Topix ended down 0.01 per cent to 1,619.11.

The Nikkei benchmark index managed to find support at its 25-day moving average of 20,059.58, but held to a tight range all through the session as the dollar weakened against the yen after Ms Yellen's congressional testimony was seen as less hawkish than some traders had anticipated.

"After all, Yellen's comment capped gains in the Japanese market as value stocks such as banks and autos weakened," said Takuya Takahashi, a strategist at Daiwa Securities.

The US dollar was 0.1 per cent lower at 113.02 yen after losing about 0.7 per cent overnight, when it was pulled back from a four-month high near 114.495 scaled earlier in the week on expectations of US-Japan monetary policy divergence.

Ms Yellen said the US economy is healthy enough for the Fed to raise rates and begin winding down its massive bond portfolio, though low inflation may leave the central bank with diminished leeway.

Technology shares attracted buying as their US counterparts rallied, with Tokyo Electron Ltd ending 3 per cent higher and Murata Manufacturing Co Ltd closing 1.1 per cent higher.

Banks lost ground after US yields fell, with Mitsubishi UFJ Financial Group ending 1.5 per cent lower, Mizuho Financial Group declined 1.3 per cent, while insurer Dai-ichi Life Holdings dropped 2.1 per cent.

The auto sector underperformed, closing 0.2 per cent lower. Toyota Motor Corp shed 0.2 per cent and Honda Motor Co dropped 0.4 per cent.

REUTERS