TOKYO, July 24 (Xinhua) -- The Nikkei stock index closed down 0. 29 percent as investors found a lack of fresh prompts to buy, although data showing China's manufacturing activity hit an 18- month high in July helped add late support.
The benchmark Nikkei 225 index lost 44.14 points to finish at 15,284.42, while the broader Topix index of all first-section issues closed 2.53 points, or 0.20 percent, lower at 1,269.86.
Strategists here said that despite Wall Street's gains overnight, including the S&P 500 hitting an all-time closing high as Apple's earnings sent tech issues higher, market players here were at a loss for fresh domestic cues to test the market's upside.
Investors were largely seen opting for issues that had already reported robust earnings for the April-June quarter, analysts noted, but individual issues' merits were not enough to boost the market mood and challenge players to take up more aggressive positions, they said.
"Players bought some selective shares that were forecast to show positive earnings. "But the market is not strong enough to spread the buying sentiment across the board," Yoshihiro Okumura, general manager at Chibagin Asset Management, said.
Data released by the Finance Ministry just before the morning bell show that Japan's trade deficit surged to a record 7.6 trillion yen (around 74.9 billion U.S. dollars) in the first half of the year, owing to exports being outweighed by surging imports, and this also did little to buoy the market mood, local brokers said.
In the period Japan saw a spike in demand as both corporations and consumers spent heavily ahead of the April 1 sales tax hike, adding to the nation's weighty import bill.
Imports for the six months surged 10 percent to 42.6 trillion yen (around 420 billion U.S. dollars) while exports rose 3.2 percent to 35.1 trillion yen (around 346 billion U.S. dollars), the ministry's preliminary data show.
Rising cost for fuel imports also contributed to the red ink, as Japan's nuclear reactors remain shuttered for safety checks in the wake of the 2011 Fukushima nuclear crisis.
In June alone, the ministry said the deficit more than tripled from a year earlier to 822.2 billion yen (8.1 billion U.S. dollars) , with imports leaping 8.4 percent on year to 6.76 trillion yen ( 66.6 billion U.S. dollars), while exports dipped 2 percent to 5.94 trillion yen (58.5 billion U.S. dollars).
While Japan kept its surplus with the U.S., imports from China surged 14 percent for the first half, with the deficit totaling 2. 92 trillion yen, and coupled with the world's second-largest economy's robust factory data, analysts here said investors were confident in China's continuing economic momentum. Local traders pointed to a preliminary reading of the HSBC/ Markit Flash China Manufacturing Purchasing Managers' Index as underpinning the market here in later trade Thursday and capping broader losses.
China's manufacturing PMI rose to 52 in July from June's final reading of 50.7, marking an 18-month high and beating median analysts' expectations. A reading over 50 shows an expansionary phase, whereas one under 50 shows contraction.
But Ayako Terada from Nomura Securities Co.'s investment research department noted that investors still remained reluctant to trade large-capital stocks, with bulls opting instead for "mid- and small-capital shares, which are volatile in nature."
In currency markets the U.S. dollar fetched 101.49 yen, compared with 101.48 yen logged in New York on Wednesday afternoon. Earlier Thursday the dollar hit 101.54 yen, giving some exporters and tech-related issues a boost.
Toyota, the world's largest automaker, accelerated 0.39 percent to 6,070 yen, while Nissan advanced 1.53 percent to close at 992 yen, following reports the car maker's group operating profit in the last quarter will exceed 110 billion yen.
Consumer electronics maker Sharp also closed in positive territory, adding 1.22 percent to 331 yen, but communications- related issues comprised one of the day's worst performing sectors.
Heavily weighted Nikkei component mobile phone carrier SoftBank, relinquished 1.80 percent to 7,459 yen, while telecommunications giant NTT slumped 1.85 percent to 6,714 yen. KDDI, meanwhile, fell 1.3 percent to close at 6,050 yen.
Game and console maker Nintendo dropped 3.4 percent to 12,595 yen, after Jefferies downgraded its rating on the firm's stock from "buy" to "hold" and cut its target price from 19,000 yen to 12,400 yen.
But photography and imaging company Fujifilm marked a particular bright spot on the market, gaining 2 percent to 2,968 yen, marking its highest close since March, following media reports the company will post an operating profit ahead of analysts' estimations at almost 30 billion yen.
Trading volume on Thursday rose to 1.95 billion shares on the Tokyo Exchange's First Section, up from Wednesday's volume of 1.78 billion shares, with declining issues outnumbering advancing ones by 872 to 792.