By Ayai Tomisawa
TOKYO, Dec 17 (Reuters) - Japan's Nikkei average was virtually flat on Friday, as losses in trading houses offset gains in financials and real estate stocks.
Investors remain cautious after the market rose sharply in a short time.
"They don't want to take large positions before the weekend, so the Nikkei may end nearly flat today," said Yutaka Miura, a senior technical analyst at Mizuho Securities.
The Nikkei has traded flat for the past four days, after having rallied about 12 percent since early November, and the market will need new incentives to break out of the tight 190-point band it has been stuck in for more than a week, traders say.
The Nikkei was up 3.58 points or 0.03 percent at 10,314.87. The broader Topix index was up 0.1 percent at 904.76.
Banking stocks rose, with Mitsubishi UFJ Financial Group gaining 1.2 percent to 440 yen and Mizuho Financial Gorup adding 1.3 percent to 152. The sector's price-to-book ratio is around 0.7, underperforming the average PBR of 1.2 for the Nikkei components.
Shares in real estate-related shares climbed after the Bank of Japan's first purchase on Thursday of real estate investment trusts, part of its asset-buying scheme launched in October that aims to push down risk premium and corporate borrowing costs.
Sekisui House, Japan's largest home builder, rose 1.4 percent to 808 yen and Mitsui Fudosan was 1.5 percent higher at 1,583 yen. Real estate was also the best-performing sector on the market, adding 1.5 percent.
Investors have been piling into the J-REIT market with the Tokyo Stock Exchange's REIT index having surged over 16 percent since the BOJ unveiled the asset buying plan in October.
The central bank said it spent 2.2 billion yen ($26.20 million) on Japanese real estate investment trusts (J-REIT) on Thursday, its first ever such purchase.
Sharp Corp gained 3.6 percent to 858 yen after the Nikkei business daily said the electronics maker would spend about 100 billion yen to build production lines for small and midsize LCDs, with Apple Inc set to purchase the bulk of the output for its iPhone.
Meanwhile, Mitsui & Co lost 1.9 percent to 1,317 on news that oil major BP was the biggest loser on Britain's blue-chip board on Thursday, as investors fretted that a U.S. government lawsuit might mean the cost of its oil spill will be far higher than predicted. Mitsui & Co owns a stake in the project. (Reporting by Ayai Tomisawa; Editing by Michael Watson)