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Tokyo stocks flat by break

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(Globalpost/GlobalPost)

Tokyo shares were flat by the break Monday, but gave up early gains fuelled by an election victory for Japanese Prime Minister Shinzo Abe's ruling party.

The Nikkei eased 2.65 points, to 14,587.26 by the break after surging 1.23 percent in the first few minutes of the day, while the Topix index of all first-section shares was also flat, inching up 0.01 points to 1,211.99.

Voters handed Abe a thumping victory in upper house elections Sunday, which will likely usher in a period of stability for politically volatile Japan.

The widely expected win means both chambers will be under government control, unblocking the bottleneck that has hampered legislation for the past six short-term premiers.

However, the headline index cooled as the dollar weakened against the yen.

In forex trading, the greenback fetched 99.90 yen, well down from 100.50 yen in New York Friday afternoon.

Still, analysts said the yen was likely to resume its downward trend that began late last year when Abe pledged to boost the economy with big-spending policies.

"The results of Sunday's upper house elections are probably the best outcome for the equity markets, especially if, as seems likely, the yen resumes its gradual decline," said London-based Capital Economics.

"Nonetheless, it is far from plane sailing from here."

The election victory gives "the government... one less excuse not to press ahead with more painful economic reforms".

Electronics giant Sharp fell 4.49 percent to 446 yen percent after the leading Nikkei business daily said it is considering a public offering that could raise more than 100 billion yen.

Sony was 0.18 percent higher at 2,192 yen, Nissan declined 0.80 percent to 1,112 yen and Uniqlo clothing chain operator Fast Retailing rose 0.27 percent to 36,250 yen.

On Friday, Wall Street ended mixed after strong earnings from some industrial companies were countered by feeble results from Microsoft and other technology firms.

-- Dow Jones Newswires contributed to this article --

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http://www.globalpost.com/dispatch/news/afp/130722/tokyo-stocks-flat-break