TOKYO, Dec 28 (Reuters) - Japan's Nikkei share average erased its earlier gains on Thursday, as the yen gained and banking shares extended their losses.
The Nikkei finished down 0.6 percent at 22,783.98, while the broader Topix slipped 0.6 percent to 1,819.03.
Friday is the last trading day of 2017, with the Nikkei on track to gain more than 19 percent.
The banking subindex slumped 1.4 percent, with Mitsubishi UFJ Financial Group down 2.2 percent.
The dollar skidded 0.5 percent against the yen to a more than one-week low of 112.80.
Idemitsu Kosan Co shares dropped 2.6 percent. The oil company's founding family, locked in a battle with the firm's management over a proposed integration with smaller rival Showa Shell Sekiyu, said it had further increased its stake in Idemitsu by about half a percentage point to about 28.5 percent. Showa Shell's shares fell 1.7 percent.
Nippon Sheet Glass Co fell 3.5 percent, a day after it cut its fiscal year net profit forecast.
The few gaining sectors included iron and steel, up 0.1 percent, non-ferrous metals, up 0.6 percent, and electric & gas shares, up 0.3 percent.
Underpinning market sentiment in the morning session, data released early on Thursday showed Japan's industrial output rose more than expected in November and companies forecast a further increase in December as robust overseas demand continues to support factory activity and broader economic growth.
As the economic outlook improves, some Bank of Japan board members have called for a debate about raising interest rates or lowering purchases of exchange-traded funds, a summary of opinions expressed at last week's policy meeting showed.
Separate capital flows data showed foreign investors turned net buyers of Japanese stocks for the week ending on Dec. 23.
Reporting by Lisa Twaronite; Editing by Sam Holmes & Shri Navaratnam