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Tokyo investors look to revised Japan growth, BoJ meet next week

Tokyo investors will be looking to revised Japanese economic growth data and a Bank of Japan (BoJ) policy meeting next week, after the Nikkei logged its strongest weekly performance in almost two months.

TOKYO:Tokyo investors will be looking to revised Japanese economic growth data and a Bank of Japan (BoJ) policy meeting next week, after the Nikkei logged its strongest weekly performance in almost two months.

Japan's first-quarter growth was the strongest in over two years, as the nation's cash registers rang up big sales ahead of a consumption tax rise that threatens to stall activity in the coming months.

Recent data showing a slowdown in spending and factory output are likely to add to pressure on the BoJ to expand its monetary easing measures to counter downturn, although policymakers are not expected to act at next week's meeting.

On Friday, Tokyo stocks closed flat with investors unmoved by the European Central Bank's launch of unprecedented easing measures to ward off deflation in the eurozone.

There was also caution ahead of May's closely watched US jobs report later Friday amid questions about the strength of the world's number one economy.

Tokyo's lacklustre performance -- after four days of gains -- came despite the Dow and S&P 500 powering to record highs in response to the ECB's decision to slash interest rates.

The benchmark Nikkei 225 index edged down 0.01 per cent, or 2.13 points, to close at 15,077.24. The index rose 3.04 per cent over the week, its best showing since mid-April, although it's still down 7.5 per cent since the start of 2014.

The Topix index of all first-section shares inched up 0.15 per cent, or 1.82 points, to finish at 1,234.57 on Friday. It rose 2.76 per cent over the week.

The European central bank put its deposit rate into negative territory for the first time -- meaning lenders will be charged for leaving funds at the ECB in the hope they might lend it on to businesses and consumers instead.

The central bank also cut its two other key rates.

"The ECB's move took nobody by surprise; alternatively the 1,000-point Nikkei rally over the last three weeks looks vulnerable as volume is mediocre at best, with no major catalysts in sight," said Naoki Fujiwara, fund manager at Shinkin Asset Management.

"While there has been some divergence between dollar/yen and the Nikkei's movements of late, the market remains fundamentally currency-driven; the yen needs to fall for stocks to go up."

And with the dollar coming off its recent highs against the yen, and the euro looking weaker, "there are few reasons to buy stocks on currency-based incentives", Fujiwara said.

In forex trading, the greenback weakened to 102.34 yen from 102.41 yen in New York. A stronger yen hurts the profitability of Japanese exporters and tends to weigh on their shares.

Sony was down 0.78 per cent to finish at 1,643 yen, while Toyota rose 0.54 per cent to 5,869 yen. Mobile carrier SoftBank fell 1.56 per cent to 7,695 yen.

Sharp rose 1.97 per cent to 310 yen after announcing it is starting a new product line featuring a device that gauges the wearer's health status.

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