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Japan's Nikkei share average was little changed by late morning on Monday as the yen's sharp gains cancelled out the lift from the Bank of Japan's fresh stimulus steps unveiled on Friday.
The Nikkei was up 0.05 per cent at 16,578.09 points, after slipping to as low as 16,319.15 earlier in the session.
The dollar tumbled 3 per cent against the yen on Friday on soft US GDP data and after the BOJ did not deliver as much stimulus as investors had anticipated.
BOJ policy stance
While the BOJ did not increase its Japanese government bond buying amount nor cut interest rates deeper below zero as many had hoped, it did opt to up its purchases of exchange-traded-funds (ETFs) to an annual pace of 6 trillion yen ($58.54 billion) from 3.3 trillion yen.
Still, some of the lift from the central bank move that had pushed the Nikkei into positive territory on Friday had already begun to fade.
“Even a two or three gain in the yen should not have much impact on equities after what the BOJ decided to do, which is nearly double its ETF purchases, said Soichiro Monji, chief strategist at Daiwa SB Investments in Tokyo.
“But the fact that the Nikkei is struggling suggests that the market is beginning to view the central bank's market-impacting methods with some scepticism.”
Meanwhile, financial firms extended gains after firming on Friday on the BOJ's decision not to take interest rates deeper into negative territory.
Mitsubishi UFJ Financial Group rose 1.8 per cent and Mizuho Financial Group added 1.3 per cent. Shinsei Bank edged up 0.7 per cent.
Exporters, on the other hand, were hurt by the yen's appreciation.
Canon Inc retreated 0.8 per cent, Tokyo Electron fell 2.4 per cent and Bridgestone Corp shed 1.3 per cent. Toyota Motor Corp declined 1.6 per cent.
Shares of NEC Corp dropped 11.3 per cent after the electronics and IT company suffered net loss of 20.1 billion yen ($196 mln) in the April-June quarter amid sluggish capital spending in the telecommunications sector.
The broader Topix was down 0.5 per cent at 1,316.03 and the JPX-Nikkei Index 400 lost 0.4 per cent to 11,830.29.
($1 = 102.4900 yen)
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