Japan shares fall as PM Abe set to dissolve parliament for new polls

Investing.com - Stocks in Tokyo traded lower on Friday with Prime Minister Shinzo Abe set to dissolve the lower house in preparation for an election next month.

The Nikkei 225 fell 0.5% at 17215.02 as the U.S. dollar held roughly flat, with trade also light ahead of a three-day weekend with markets shut on Monday in Tokyo.

The Nikkei has gained 4.7% month to date, spurred by a surprise monetary stimulus announcement by Japan at the end of October, the delay of a tax hike originally planned for next year and a weak local currency. The U.S. dollar rose to Yen118.72 Thursday, its highest since August 2007.

Tokyo was headed for a 1.8% loss this week, however, as investors assess how the government will address a flagging economy, now in a technical recession.

Australia's S&P/ASX 200 was flat and Korea's Kospi was up 0.3%.

Overnight, U.S. stocks rose on Thursday after Wall Street applauded a flurry of upbeat U.S. economic indicators, while buoyant revenue forecast from chipmaker Intel pushed up indices as well.

The Dow 30 rose 0.19%, the S&P 500 index rose 0.20%, while the Nasdaq Composite index rose 0.56%.

Manufacturing activity in the Philadelphia-region expanded at its fastest rate since December 1993 in November, fueling optimism over the U.S. economic outlook, official data showed on Thursday.

The Federal Reserve Bank of Philadelphia reported earlier that its manufacturing index improved to 40.8 this month from 20.7 in October.

Analysts had expected the index to decline to 18.5 in September.

On the index, a reading above 0.0 indicates improving conditions, below indicates worsening conditions.

The current new orders index, which reflects the demand for manufactured goods, increased 18 points, to 35.7.

The current employment index rose 10 points in November, to 22.4, and hit a 3½ year high.

Separately, the Labor Department reported that the U.S. consumer price index was unchanged in October, beating expectations for a 0.1% dip.

On a year-over-year basis consumer prices rose 1.7% last month, unchanged from September, and stronger than market calls for a 1.6% jump.

Core inflation, which strips out volatile food and energy components, rose by 0.2% during the month, pushing the annual rate up to 1.8%, both figures in line with market forecasts.

Also from the Labor Department, data released earlier revealed that the number of Americans filing new claims for unemployment benefit fell by 2,000 last week, to 291,000. Economists had expected a fall to 286,000, thought it was still the tenth straight week that initial claims remained below 300,000.

The number of continuing claims also fell, to 2.33 million, the lowest level since December 2000.