Japan's Nikkei ends lower, off 2-week high amid election outcome worries
The Nikkei fell 0.21% to 39,819.11. Earlier, it had risen to as high as 40,087.59, its highest level since July 1, underpinned by the strong performance of Wall Street.
The S&P 500 stock index and the Nasdaq Composite both finished at record highs on Thursday, as investors embraced strong economic data and earnings reports that showed American consumers remained willing to spend.
For the week, the Nikkei rose 0.63% to snap two straight weeks of losses.
The broader Topix slipped 0.19% to 2,834.48.
"Investors did not want to take a risk in buying stocks ahead of the national election on the weekend," said Yugo Tsuboi, chief strategist at Daiwa Securities.
Prime Minister Shigeru Ishiba's Liberal Democratic Party (LDP) and its partner Komeito are expected to lose their majority in the upper house on Sunday.
Strategists now focus on whether Ishiba will remain in his position or step down after the election, as a gauge of the nation's potential policy shift, which could lead to a cut in the national consumption tax.
Chip-related Advantest fell 4.44%, the biggest drag on the Nikkei.
Disco was the largest percentage loser on the Nikkei, tanking 8.79%, as the chipmaking device supplier's quarterly operating profit forecast missed market expectations.
Technology investor SoftBank Group rose 5%, the biggest percentage gainer and the biggest support for the index.
Chipmaking equipment maker Tokyo Electron erased early losses to end 0.29% higher.
Of more than 1,600 stocks on the Tokyo Stock Exchange's prime section, 33% rose and 63% fell, and 2% traded flat.
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