The Nikkei average edged up 0.1 percent on Friday, handing back early gains after running into technical resistance, but Mitsui O.S.K (9104.T) and other shipping companies steamed higher after a key industry index rose to an eight-month high on Thursday.
Toshiba (6502.T) rose 2 percent to 355 yen after public broadcaster NHK reported it planned to raise its chip production level in July back to where it was before cuts began in January.
Oil and gas field developer Inpex and other oil-linked shares climbed after U.S. crude oil futures rose on Thursday to over $65, a six-month high, on government data showing a steep drop in oil inventories last week.
"From a technical point, the Nikkei faces selling pressure ahead of 9,500 after climbing above the 200-day moving average midway through the week," said Yumi Nishimura, deputy general manager of the investment advisory section of Daiwa Securities
SMBC.
"Industrial output was also much better than anticipated, but the market appears to have priced in the good numbers mostly beforehand while looking beyond them to other less than encouraging data," Nishimura said.
Japan's industrial output jumped 5.2 percent in April from the previous month, marking the second straight month of increase as companies continue to restock after a heavy run-down of inventories late last year.
The upbeat production figures were partially offset by other indicators released on Friday showing that domestic demand was still fragile.
The jobless rate rose to a 5- year high of 5.0 percent in April, while household spending fell 1.3 percent from a year earlier and Japan moved deeper into deflation.
The benchmark Nikkei .N225 ended the morning up 5.78 points at 9,457.17 after rising as high as 9,489.66, while the broader Topix dipped 0.2 percent to 893.92.
"Corporate confidence will have to improve more for the Nikkei to rise even further. This means corporations will have to begin raising their earnings forecasts for the financial year and see a return to profits," said Junichi Misawa, a senior fund manager at STB Asset Management.
SHIPPERS ADVANCE
The Baltic Exchange's main sea freight index .BADI., which gauges the cost of shipping resources including iron ore, cement, grain, coal and fertiliser, rose on Thursday to an eight-month high, helped by China's demand for goods.
Mitsui O.S.K. Lines rose 4.5 percent to 672 yen, Kawasaki Kisen (9107.T) gained 4.7 percent to 424 yen, and Nippon Yusen (9101.T) climbed 4.2 percent to 451 yen.
The sea transport sub-index .ISHIP.T jumped 4.4 percent, becoming one of the biggest gainers among the sub-indexes.
