Tokyo: Japan's Nikkei stock average was flat on Friday as investors cautiously awaited a speech from Federal Reserve Chairman Ben Bernanke for clues on what steps the US central bank will take to support the economy.
Bernanke, scheduled to speak on Friday at 10 am New York time (1400 GMT), is most likely to outline gradualist measures to help the economy, which would disappoint those looking for dramatic action, such as a fresh round of asset purchases.
The market was stuck in a narrow range. Foreign investors took profits on the previous day's gains, albeit less than expected due to a weaker yen, while dip-buying by retail investors supported the market, analysts said.
"The index remains below 9,000, and this is the level where retail investors buy stocks with attractive valuations," said Hideyuki Okoshi, general manager at Chibagin Securities.
The benchmark Nikkei was flat at 8,775.29 after opening lower, while the broader Topix index gained 0.2 per cent to 753.22.
Tokyo shares' valuations remain attractive, with shares listed on the Tokyo stock exchange's first section staying around their book value, while shares on the S&P 500 are trading at 1.9 times their book value.
Analysts also said that trading may be subdued ahead of the weekend.
"While there is speculation that there may not be a clear indication of QE3 from Bernanke, investors do not want to take positions," said Yutaka Miura, a senior technical analyst at Mizuho Securities. The dollar on Thursday rose to 77.48 yen , up 0.7 per cent.
Kyowa Hakko Kirin rose 4.6 per cent to 795 yen after the company said on Thursday it will spend as much as 20 billion yen to buy back up to 4.4 per cent of its own shares between August 26 and February 29.
KDDI Corp rose 2.8 per cent to 557,000 yen after Mitsubishi UFJ Morgan Stanley analyst Hideaki Tanaka upgraded his view on Japan's No 2 phone company to "outperform" from "neutral" and raised his target price to 670,000 yen from 610,000 yen on an expected boost from smartphones and cost cuts in fixed-line operations.
Mizuho Securities analyst Atsuo Takahashi also upgraded his rating on the stock to "outperform" from "neutral" and raised his price target to 640,000 yen from 430,000 yen, citing stronger sales and profit growth in KDDI's fixed line segment.