SINGAPORE, Feb 21 (Reuters) - Japan's Nikkei share average edged down on Tuesday after a business survey showed the country's manufacturing activity contracted at its fastest pace in 30 months in February. The Nikkei index was down 0.05% at 27,519.5 points as of the midday break.
The decline follows broader weakness in Asian markets and U.S equity futures as investors weigh the possibility of U.S Fed tightening its policy further to cool inflation.
U.S markets were closed on Monday for President's Day holiday.
The focus will likely remain on monetary policy expectations in the United States and Japan for this week, Naka Matsuzawa, chief Japan macro strategist at Nomura Securities, said in a note.
Incoming Bank of Japan Governor Kazuo Ueda is scheduled to testify before parliament on Friday, the same day the country is due to release data for January inflation, which is likely to have accelerated to a new 41-year high, above 4%, according to a Reuters poll.
Top losers in the Nikkei on Tuesday included department store J. Front Retailing Co Ltd and pharmaceutical firm Eisai Co Ltd, down 1.7% and 1.5%, respectively.
Top gainers included paper firm Nippon Paper Industries Co Ltd and printing firm Toppan Inc, up 4.9% and 4.2%, respectively.
Gainers, however, beat losers by 124 to 93, with eight remaining unchanged.
The broader Topix rose 0.7% at midday break to 2,001.13 points.
Stocks in the Topix that gained the most included industrial machine firm Altech Co Ltd and supermarkets firm Daikokutenbussan Co Ltd, up 14.3% and 10.6%, respectively.
Hosiden Corp shares jumped 5.9% on Tuesday after City Index Eleventh Co announced it has bought a 5.3% stake in the Japanse electronics maker.
The biggest percentage losers in the Topix were ball bearing manufacturing firm Tsubaki Nakashima Co Ltd and educational support services firm Litalico Inc, down 11.9% and 3.8%, respectively.
Gainers outpaced losers by 1,326 to 697 in the Topix, with 140 remaining unchanged.
Meanwhile, the yen weakened 0.12% to 134.40 per dollar.
Data released earlier on Tuesday showed Japan's manufacturing activity contracted for a fourth month in a row, its service-sector activity has expanded for six months following further relaxation of COVID-19 restrictions.
The government last month said it would downgrade COVID-19 public health classification in May. (Reporting by Yantoultra Ngui Editing by Vinay Dwivedi)
