TOKYO, Dec 18 (Reuters) - Japanese shares edged lower on Wednesday as investors stayed on the sidelines after data showed that the trade-reliant economy's exports shrunk for the 12th month amid the Sino-U.S. tariff war, raising the risk of a fourth-quarter contraction.
The Nikkei index was down 0.30% at 23,993.69, as of 0147 GMT, with industrial and technology sectors leading the declines.
In the previous session, the benchmark index touched its highest since Oct. 4, 2018.
The Nikkei advanced 20.24% so far this year. It has surged almost 13% from its October low, and a few investors are closing out positions to book gains on this rally.
Official data released on Wednesday showed Japan's exports fell 7.9% year-on-year in November. It was the longest run of declines in exports since a 14-month stretch to November 2016 as shipments of cars and construction machinery to the United States and chemical products to China fell.
Traders, however, are trying to look beyond the lacklustre data as a de-escalation in the U.S.-China trade dispute and an improving U.S. economy fuelled expectations that Japan's exports will recover next year.
Providing a floor under the market was positive sentiment following U.S. data that showed a rebound in manufacturing and a bigger-than-expected increase in U.S. housing starts, lifting Wall Street to a record high on Tuesday.
Also supporting sentiment across global equities were a "phase-one" trade agreement between the United States and China, and UK Prime Minister Boris Johnson's landslide election win last week that stoked hopes of a swift Brexit.
There were 95 advancers in the Nikkei index against 128 decliners.
The largest percentage losses in the index were drugmaker Daiichi Sankyo Co Ltd down 4.88%, followed by silicon wafer maker Sumco Corp losing 3.59% and electric parts maker Fujikura Ltd down by 2.73%.
The largest percentage gainers in the index were industrial conglomerate Hitachi Ltd up 3.4%, followed by medical equipment maker Olympus Corp gaining 2.79% and Nippon Electric Glass Co Ltd, which advanced 2.37%.
The broader Topix index rose 0.3% to 1,741.95. On Tuesday it reached the highest since Oct. 10, 2018.
The volume of shares traded on the Tokyo Stock Exchange's main board was 0.5 billion, compared with an average of 1.22 billion shares in the past 30 days. (Reporting by Stanley White, Editing by Sherry Jacob-Phillips)