Japanese shares slipped from near 1-1/2-year highs on Friday as the market took a breather from its rally since mid-April, while trading was also influenced by a mixed bag of earnings with Nissan Motor rising on a surprise dividend hike.

The Nikkei share average ticked down 0.7 per cent to 19,823.28 as some investors booked profits. The index has gained more than 3 per cent so far this month and in excess of 9 per cent from its April 17 low of 18,225.

“There are many people who failed to take profits in March when the Nikkei peaked just below the 20,000. So those people are likely to be selling now,” said Soichiro Monji, chief strategist at Daiwa SB Investments.

But some market players expect the Nikkei to eventually clear the 20,000 mark, given a generally upbeat outlook for the global economy.

The broader Topix dropped 0.7 per cent to 1,575.53.

On the week, both the Nikkei and the Topix look set to post their fourth straight week of gains, helped also by easing worries over European politics and tensions in the Korean peninsula.

The market's immediate focus is on corporate earnings, which will hit a peak for this season on Friday.

Among the companies that have announced earnings so far, operating profits are seen rising 3.6 per cent in the year to March 2017, said Kenji Abe, chief strategist at Okasan Securities. “So far, positive surprises and negative surprises balance out. The earnings have not been particularly strong but there isn't much to worry about either,” he said.

Rakuten jumped more than 10 per cent after the internet firm posted strong earning growth in the January-March quarter on Thursday after market close.

Market players are rotating into domestic demand-led shares, such as retailers, which rose 0.5 per cent, even after their US peers tumbled following weak earnings.

Retailers have gained 7 per cent so far this quarter, compared to 4.2 per cent gains in the Topix in the same period.

Department store operator Marui Group jumped more than 10 per cent on its solid earnings and share buy-back announcement. On the other hand, carmakers underperformed as the yen rebounded from near two-month lows.

Transport equipment maker subindex dropped 1.3 per cent, with Denso falling 1.9 per cent and Honda Motor shedding 1.7 per cent

Bucking the trend, Nissan rose 3.6 per cent on its dividend hike plan although it forecast an unexpected fall in profits and its guidance were lower than analyst expectations.