Tokyo stocks open higher after modest gains on Wall Street as the US central bank signalled it could soon cut interest rates.
Shares remained under moderate pressure throughout the session as investors cashed in on recent gains.
Tokyo stocks had risen in early trade, tracking gains on Wall Street following the latest encouraging reports from the US-China trade talks.
The agreement in principle in Washington to avoid another shutdown helped boost Wall Street overnight.
The Nikkei share average rose 1.0% to 20,773.56, the highest closing level since Dec 19.
The bellwether index lost 12.1% from a year earlier to end at 20,014.77 in roller-coaster trade.
The yen's appreciation came to a lull, helping boost exporter shares on Wednesday.
Investors largely ignored a decline in business sentiment among large Japanese manufacturers announced by the Bank of Japan shortly before the market opened.
The Nikkei 225 index gained 0.29% or 70.33 points to close at 23,940.26, rising for the seventh straight session.
The Nikkei 225 index closed up 0.82%, or 195.00 points, at 23,869.93. Over the week, the index gained 3.36%.