Japan's Nikkei share average seesawed in and out of positive territory in early trade on Monday as fresh reasons to buy were thin on the ground and technical resistance weighed heavy, but hopes for further stimulus prevented a steep drop.
Similar trends to the end of last week were seen, with DeNa Co Ltd gaining 1.6% after soaring 22%on Friday due to strong results.
Sony Corp put on 2% to continue its ascent after gaining 2.7% on Friday, when the company said it would make internet provider So-net Entertainment into a wholly owned unit.
Sharp Corp continued to slide, dropping 3.8%despite news from the Nikkei business daily that it is considering selling its liquid crystal display (LCD) modules to Taiwan's Hon Hai Precision Industry .
The Nikkei was flat at 8,893.99 while the broader Topix index was also flat at 747.30.
Nippon Sheet Glass Co Ltd jumped 5.4% after the Nikkei business daily said the company would resume the construction of a Vietnamese plant to make glass for touch panels after severe business conditions led to construction being suspended in February.
Signs of a slowdown in Japan's domestic economy were evident as data showed GDP grew just 0.3% in the April-June quarter, which translates to an annualised increase of 1.4%, below the median forecast of 2.5%.
"It's actually close to what I personally expected although I'm sure the market is disappointed; the yen is still very strong, the global economy isn't looking so good," said Fumiyuki Nakanishi, general manager of investment and research at SMBC Friend Securities. "The post-tsunami consumption boom is still some way off as soon many people are still in temporary housing."
Daiwa House Industry Co Ltd dropped 5.3% after the company said it would pay 50 billion yen to make affiliate company Fujita a fully owned subsidiary and as Nomura Holdings dropped its rating to "neutral" from "buy", saying its strong April-June earnings had already been priced in.
Japan's earnings season, now in its last throes, has been largely disappointing, with 53% of the 152 Nikkei companies that have reported results falling short of guidance and many firms cutting full-year profit outlooks due to a strong yen and the impact of a global slowdown on demand.
Market analysts said the market was likely to remain in "holiday mode" this week, characterised by trade staying thin for lack of fresh catalysts, with its movements limited by the absence of policy decisions or major data in the offing.
"It's going to be defined by technical parameters this week," said Toshiyuki Kanayama, senior market analyst at Monex.
"There's quite significant resistance at the 200-day moving average mark around 8,957; it tested that level last week and quickly backed away, and this week there doesn't seem to be any factors that will push it beyond."
The focus shifted to individual stocks instead of the market as a whole.
Daio Paper Corp rose 1.7% after the Nikkei business daily said it was expected to more than double its annual profit to 10 billion yen for the year ending March 2013, above a previous forecast of 8 billion yen, because several firms are no longer counted as part of the consolidated group as the founding family that held a stake in them has been ousted from the firm.
Sony advanced 2%, while So-net remained untraded with a glut of buy orders, although it was nominally trading at 472,000 yen.
The Nikkei is now up 5.1% on the year, but is still 13.3% off its one-year high hit on March 27 of 10,255.15, hurt by concerns about falling demand due to the euro zone debt crisis, a faltering US recovery and a slowdown in China.
