Tokyo investors will keep a close eye on data releases next week, including US jobs figures, as well as a European Central Bank meeting where policymakers may launch further easing measures.
On Friday, the benchmark Nikkei 225 index closed down 0.34 per cent, snapping a six-day winning streak, as the stronger yen dented exporters and erased early gains which followed another record close on Wall Street.
The headline index lost 49.34 points to finish at 14,632.38, but added 1.18 per cent over the week and logged its first monthly gain of 2014. The Nikkei is still down 10 per cent since the start of the year.
The Topix index of all first-section shares ended flat, inching up 0.06 per cent, or 0.73 points, to 1,201.41. It rose 1.78 per cent over the week.
Investors are keeping an eye on the European Central Bank's policy meeting on Thursday as markets bet that it will roll out more measures to counter a threat of deflation in the eurozone.
In the US, jobs data will be a key trading cue, said Hideyuki Suzuki, general manager of the investment market research department at SBI Securities.
"If the number of non-farm payroll jobs turns out to be above 200,000 in May, that would be a tailwind to the stock market," he told AFP.
Before the market opened Friday, the Japanese government released a mixed bag of economic data that showed April factory output and household spending were lower than expected while the jobless rate was at its lowest level in nearly seven years.
"For investors to get excited about stocks, they need a sense of clarity about the economic environment -- it's hard for them to invest in 'shades of grey'," CLSA equity strategist Nicholas Smith told Dow Jones Newswires.
An equity trading director at a European brokerage said a stronger yen made "profit-taking too hard to resist after six straight days of Nikkei gains".
The string of data Friday was not bad enough to spark hopes for imminent monetary easing by the Bank of Japan, which would tend to weaken the yen and lift stocks, the trader said.
A weaker yen boosts the profitability of major exporters such as Toyota and Sony.
On currency markets, the US dollar weakened to 101.62 yen from 101.78 yen in New York Thursday.
In Tokyo stocks trade, market heavyweight Fast Retailing, operator of the Uniqlo clothing chain, fell 1.24 per cent to 33,590 yen, Japan Airlines lost 0.58 per cent to 5,310 yen while Mitsubishi slipped 0.19 per cent to finish at 2,009 yen.
Toyota rose 1.73 per cent to 5,761 yen and Honda gained 0.82 per cent to 3,563 yen following Thursday's better-than expected domestic auto output figures for April.
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