Tokyo shares closed mixed on Monday as better-than-expected US jobs data were overshadowed by poor Japanese figures and caution over talks in Washington aimed at averting the fiscal cliff.
The benchmark Nikkei 225 index inched 0.07 percent higher, or 6.36 points, to 9,533.75, while the broader Topix index of all first-section shares slipped 0.22 percent, or 1.76 points, to 788.48.
Upbeat US jobs data on Friday helped sentiment, although investors were nervously watching the US fiscal cliff budgetary impasse for signs of a new spending deal in the deeply divided US Congress.
Also helping sentiment, China released a series of figures on Sunday showing strength picking up in the world's second-largest economy.
"The positives certainly cannot be overlooked," said SMBC Nikko Securities general manager of equities Hiroichi Nishi.
But "there seems to be little hope of resolution in US fiscal cliff negotiations -- a major negative," he told Dow Jones Newswires.
Many investors would wait on the sidelines ahead of Sunday's general election in Japan with main opposition leader Shinzo Abe, the frontrunner to become the country's next prime minister, vowing to pressure the Bank of Japan for more aggressive monetary easing measures to boost growth.
Official data Monday confirmed Japan's economy contracted in the three months to September, stoking recession fears and speculation the central bank would launch further policy action.
Japan's October's current account surplus came in better-than-expected in separate data on Monday, but the broad measure of its trade with the rest of the world was still down about 30 percent year on year.
The BoJ releases its key Tankan corporate sentiment survey later this week.
In Tokyo trade, Panasonic was 0.71 percent lower at 417 yen, Sony lost 0.84 percent to 820 yen and Mitsubishi UFJ Financial Group lost 1.04 percent to 379 yen.
On currency markets, the greenback bought 82.37 yen in Tokyo, from 82.46 yen in New York trade late Friday, while the euro slipped to $1.2891 and 106.18 yen from $1.2928 and 106.64 yen.