Headline indices of the Japan share market were lower on Friday, 14 December 2018, as investors moved to secure gains following the lackluster cues from Wall Street overnight amid skepticism about a U.S.-China trade deal. Selloff pressure was also fuelled by weaker than expected Chinese and local economic data, including the Bank of Japan's closely-watched Tankan Survey that showed confidence among large Japanese manufacturers was steady in December. Total 32 issues out of 33 issues of the Topix index declined, with shares in Mining, Precision Instruments, Machinery, Securities & Commodities Futures, Construction, and Information & Communication issues being notable losers. In late afternoon trades, the 225-issue Nikkei index declined 376.52 points, or 1.73%, at 21,439.67. The broader Topix index of all First Section issues on the Tokyo Stock Exchange shed 20 points, or 1.24%, to 1,596.65.

Trade sentiment soured after the Bank Of Japan's tankan survey showed that large Japanese manufacturers' sentiment index for the outlook worsened for the first time in three quarters.

Market participants remained somewhat skeptical the U.S. and China will manage to reach a long-term trade agreement amid ongoing disputes over intellectual property and other key issues. On Thursday, U.S. Commerce Secretary Wilbur Ross told Bloomberg TV that China will need to do more than what it has promised so far to ease trade tensions.

Investors risk sentiments were muted after weaker than expected economic data from China, Australia's largest trading partner. China's industrial output and retail sales growth for the month of November missed expectations, reinforcing worries about a slowdown in the world's second largest economy amid trade tensions with the U.S. China's retail sales grew at the weakest pace since 2003, while industrial output grew at its slowest pace in nearly three years. China's fixed-asset investment up in November --China's industrial output in November grew 5.4% year-on-year, 0.5 percentage points lower than October, the National Bureau of Statistics said on Friday. Fixed-asset investment growth was 5.9% in the first 11 months, quickening by 0.2 percentage points compared with the first 10 months.

Also, global sentiment dampened after European Central Bank President Mario Draghi flagged persistence of uncertainties related to protectionism, emerging markets' vulnerability and market volatility, as the bank ended its crisis-fighting bond purchase programme.

Foreign investors sold a net 600.1 billion yen ($5.29 billion) worth of Japanese cash stocks in the first week of December, marking a fourth straight week of selling, data from Japan Exchange Group showed. The figure was the second biggest of this

Shares of exporters were lower, with Canon, Panasonic, Sony, Honda, and Mitsubishi Electric were lower in range of 0.5% to 2%. Advantest was lower by 3% and Tokyo Electron fell almost 5%.

Shares of Japan Display surged more than 38% after reports that Apple supplier Japan Display is in talks with Chinese businesses and investment funds to get support for its turnaround efforts.

In economic news, sentiment among Japan's large manufacturers remained unchanged in the three months to December, following three straight quarters of decline, the Bank of Japan's latest Tankan survey showed on Friday. The closely watched index of sentiment among large manufacturers was plus 19 for the October-December period, unchanged from September. The outlook came in at +15, down from +19 in the previous three months.

CURRENCY NEWS: The Japanese yen, which can be a haven during market uncertainty, was changed in the upper-113 yen range against dollar on Friday, largely in line with its levels in New York overnight. The dollar was quoted at 113.57-58 yen compared with 113.52-62 yen in New York and 113.39-40 yen on Thursday in Tokyo. The euro, meanwhile, fetched 129.06-10 yen against 128.98-129.08 yen in New York and 129.06-10 yen in Thursday trade in Tokyo.