Tokyo's benchmark Nikkei index closed lower on Friday, ending the year with its first annual loss since 2012, as negative factors including US-China trade tensions weighed on the market.
The bellwether index lost 12.1 percent from a year earlier to end at 20,014.77 in roller-coaster trade, while the broader Topix index was down 17.8 percent in 2018 at 1,494.09.
The Nikkei 225 index surged to a 27-year high in October on a cheap yen and rallies on Wall Street but has since rolled downslope. The index lost more than five percent on Tuesday to have the worst finish since April 2017.
On Friday alone, the Nikkei lost 0.31 percent and the Topix fell 0.50 percent as investors cashed in ahead of the New Year holidays.
The Tokyo markets will not resume trading until Friday next week.
"The Nikkei scored annual gains for the past six years under Abenomics but it's not the case any more," Makoto Sengoku, market analyst at Tokai Tokyo Research Centre, said referring to Prime Minister Shinzo Abe's pro-spending policies.
"This is because of large swings caused by the Trump administration rather than domestic problems," he told AFP, noting President Donald Trump's trade spat with China weighed particularly on the market.
Japan "cannot be unaffected when the world's two biggest economies are fighting," he said.
Naoki Fujiwara at Shinkin Asset Management said the market is still forecast to recover the recent losses "once the US-China trade war and Brexit can be settled."
Japanese corporate activity remains solid at least for now, which could invite buy-backs sometime next year, he added.
Fresh government data released Friday confirmed Japan's job market remains tight, with unemployment staying low at 2.5 percent for November.
Factory output in November turned down 1.1 percent from the previous month, but the drop had been widely expected after an October rise in production.
The dollar edged down to 110.68 yen in Asian afternoon trade from 111.02 yen in New York Thursday afternoon.
In Tokyo share trading, Sony dropped 1.07 percent to 5,326 yen with Toyota down 0.14 percent at 6,406 yen.
Market heavyweight Uniqlo operator Fast Retailing lost 0.44 percent to 56,370 yen but SoftBank Group rose 0.34 percent to 7,305 yen.
