TOKYO, Nov 21 (Reuters) - Japanese stocks tumbled on Thursday on concerns that a U.S.-China "phase one" trade agreement will be delayed, but losses were pared after China's top negotiator reportedly expressed optimism that a deal can still be reached.
The Nikkei share average fell 0.5% to 23,038.58 points, its lowest close since Nov. 1, after a choppy session.
Analysts said profit-taking set in after the benchmark fell below both the psychological 23,000 level and the key 25-day moving average, which last stood at 23,016.
In early trade, the benchmark slid as much as 1.8% to 22,726.72, a three-week low, on concerns a preliminary trade deal between Washington and Beijing may not be completed this year.
Adding to the tensions between the world's two biggest economies, the U.S. House of Representatives on Wednesday passed legislation intended to support protesters in Hong Kong and send a warning to China about human rights.
Bloomberg News reported on Thursday that China's Vice Premier Liu He said he was "cautiously optimistic" on a phase one deal. Liu reportedly made the comment in a dinner speech in Beijing on Wednesday, citing people who attended the event ahead of a forum organized by Bloomberg LP.
Recent gainers, most notably semiconductor-related stocks, were on the retreat. Tokyo Electron dropped 3.4%, Advantest Corp slid 3.9% and Screen Holdings dived 4.4%.
Nikkei heavyweight SoftBank Group fell 1.6% after media reported the tech conglomerate is in talks for a loan of about 300 billion yen ($2.8 billion) from Japanese banks, led by Mizuho Financial Group. Mizuho's shares ended flat.
With the Topix index ending the morning session 1% lower, traders had expected the Bank of Japan's buying should lend some support to the stock market in the afternoon.
The broader Topix recouped most of its early losses to end down 0.1% at 1,689.38.
BOJ data released late Wednesday showed the central bank bought exchange traded funds (ETFs) for the first time in six weeks, apart from its daily purchases of ETFs to support capital spendings. ($1 = 108.4900 yen) (Reporting by Tomo Uetake; Editing by Shri Navaratnam & Kim Coghill)