Japan's Nikkei share average eked out small gains on Thursday with traders noting the Bank of Japan bought up exchange traded funds, offsetting weakness in machinery makers.

The Nikkei ended 0.1 per cent higher at 21,803.95, crawling back from negative territory after ending the morning session lower. Retail stocks gained ground, with FamilyMart rising 1.9 per cent, and Marui soaring 7.3 per cent.

Japan's construction machinery and machine tool makers underperformed, hit by worries that global trade tensions could hurt demand after US President Donald Trump sought to impose fresh tariffs on China.

The Trump administration is pressing China to cut its trade surplus with the United States by $100 billion, the White House had said on Wednesday.

Analysts said that Trump's demands could cut Chinese exports and capital expenditure potentially sapping demand for machinery made by Japanese firms, many of which have substantial sales in China.

Construction machinery maker Komatsu Ltd dropped 1.7 percent and Hitachi Construction Machinery stumbled 3.1 per cent.

Axle bearings maker NTN Corp tumbled 3.2 per cent, machine tool maker DMG Mori dropped 1.5 per cent, while and Okuma Corp , a maker of numerically-controlled machine tools, fell 1.5 per cent.

Shippers dipped after the Baltic Dry Index of freight charges fell. Mitsui OSK Lines dropped 0.8 per cent and Kawasaki Kisen fell 1.2 per cent. The broader Topix index was flat at 1,743.60.

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