The Japanese stock market has pared initial losses and is modestly lower on Monday following the modest gains on Wall Street Friday and a weaker yen. Investors digested mixed local economic data, including the Tankan business survey results that showed business sentiment in Japan worsened for the second straight quarter.
The benchmark Nikkei 225 Index is losing 10.47 points or 0.05 percent to 22,294.04, after touching a low of 22,227.97 in early trades.
The major exporters are mostly higher on a weaker yen. Canon is adding 0.2 percent, Sony is advancing more than 1 percent and Panasonic is rising almost 2 percent, while Mitsubishi Electric is losing 0.6 percent.
Automaker Toyota is edging up 0.1 percent, while Honda is edging lower by 0.1 percent. In the banking sector, Mitsubishi UFJ Financial is lower by 0.2 percent and Sumitomo Mitsui Financial is declining 0.6 percent.
Among oil stocks, Inpex is rising 0.5 percent and Japan Petroleum Exploration is advancing almost 1 percent after crude oil prices rose to a four-year high.
Among the market's best performers, Taiyo Yuden is gaining almost 5 percent and Screen Holdings is rising almost 4 percent. Sky Perfect JSAT and NTN Corp. are higher by more than 3 percent each.
On the flip side, Aeon Co., Shiseido Co. and Kikkoman Corp. are losing more than 3 percent each.
In economic news, the Bank of Japan said on Monday in its quarterly Tankan business survey that an index monitoring business sentiment in Japan ebbed in the second quarter of 2018.
The large manufacturers' index came in with a score of +21, missing expectations for +22 and down from +24 in the previous quarter. The outlook came in at +21, topping expectations for +20 - which would have been unchanged from the three months prior.
The latest survey from Nikkei revealed that the manufacturing sector in Japan continued to expand in June, and at an accelerated rate, with a manufacturing PMI score of 53.0. That's up from 52.8 in May, and it moves further above the boom-or-bust line of 50 that separates expansion of contraction.
In the currency market, the U.S. dollar is trading in the 111 yen-range on Monday.
On Wall Street, stocks pared initial gains to closed modestly higher on Friday.
Strength in the financial sector helped to drive the markets higher early in the day after most of the nation's largest banks passed the Federal Reserve's annual stress test. The late-day pullback may have reflected lingering concerns about the global economic impact of recent trade disputes between the U.S. and other major economies.
The tech-heavy Nasdaq briefly dipped into negative territory but inched up 6.62 points or 0.1 percent to 7,510.30. The Dow edged up 55.36 points or 0.2 percent to 24,271.41, and the S&P 500 crept up 2.06 points or 0.1 percent to 2,718.37.
The major European markets also moved to the upside on Friday. While the U.K.'s FTSE 100 Index rose by 0.3 percent, the French CAC 40 Index advanced by 0.9 percent and the German DAX Index jumped by 1.1 percent.
Crude oil prices continued to surge Friday, marking a 20 percent year-to-date increase in crude oil prices. WTI crude added $0.70 or nearly 1 percent to settle at $74.15 a barrel on the New York Mercantile Exchange - the highest in four years.