The Nikkei average edged down 0.19 % yesterday as losses in Honda Motor Co. and other blue chips stocks were mostly offset by gains in Softbank Corp. and recently battered stocks such as banks.

Auto makers and technology companies such as Kyocera Corp. were hit by concerns about holiday spending in the key US market.

But Softbank rose 2.4 % as a recovery in small-cap shares encouraged retail investors to buy shares of the Internet and telecoms group. Shares of banks such as Mitsubishi UFJ Financial Group, as well as steel makers including JFE Holdings Inc., also gained on bargain-hunting.

Japanese retail sales rose 0.1 percent in October from a year earlier, stronger than forecasts for a 0.1 percent fall and a 0.2 percent drop in September, but indicating spending remained lacklustre.

The Nikkei closed down 30.12 points at 15 855.26, after rising 0.96 % on the day before.

The broader TOPIX index gained 0.14% to 1 555.11, extending a 0.97 % advance in the previous session.

Trade volume rose to 1.71 billion shares from 1.51 billion. Market participants said they expected trade to stay in a narrow band for the time being.

Bank of Japan Governor Toshihiko Fukui provided no fresh hints on the timing of the next rate hike in his speech yesterday, repeating that the BOJ would adjust rates gradually based on the economy and prices.

Many traders expect the BOJ to raise the overnight call rate target to 0.5 % from the current 0.25 % by March.