Nikkei softens after hitting 2-week high, weak yen supports

Japan's Nikkei average edged lower on Friday as profit-taking kicked in after it advanced to a two-week high shortly after the opening, with investors keen to lighten recently built positions ahead of the weekend.

The benchmark Nikkei average climbed as high as 9,805.93 -- its highest since March 14 -- on follow-through buying spurred by a weaker yen, after posting solid gains over the last two sessions.

But the market ran out of steam as it approached closely watched technical resistance at the 200-day moving average around 9,820.

Investors were also cautious about holding onto big long positions over the weekend as uncertainty lingered over the aftermath of last month's devastating earthquake and what looks likely to be a prolonged nuclear crisis.

"Considering that today is the start of the new financial year, we saw some solid buying at the beginning, but the market turned careful about extending purchases," said Kazuhiro Takahashi, general manager at Daiwa Securities.

"Recent bullishness in US stocks is encouraging, but at the same time a strong economic recovery in the United States would mean that it may have to consider ending its current monetary policy, which will be negative for shares."

Japanese stocks are expected to draw support after the yen slipped to a fresh three-week low against the dollar. The Japanese currency was trading at 83.62 yen against the dollar on Friday morning.

Still, stock market participants wanted to see US jobs data due later in the day to assess the trend of the US economy, traders said.

By mid-morning trade, the Nikkei average was down 11.64 points, or 0.1% at 9,743.46. The broader Topix fell 0.2% to 867.69.

Shares of Tokyo Electric Power Co plunged 12% to 410 yen after climbing shortly after the opening.

The Mainichi newspaper, quoting an unnamed government official, said on Friday that the Japanese government was planning to inject funds into the utility but was unlikely to take more than a 50% stake in it.

Shares in Japan's biggest oil and gas developer, Inpex Corp, and other oil-related companies extended solid gains made after the earthquake of March 11, as the price of oil hit a 2-1/2-year high on Thursday on ongoing supply threats due to turmoil in Libya and the Middle East.

Inpex jumped 4.8% to 661,000 yen in heavy trade. It has surged nearly 20% since the quake, while the Nikkei benchmark has lost more than 7% in the same period, as the disaster spurred demand for oil and gas products amid a shortage in energy supplies.