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Tokyo stocks ended flat Friday on the year's last trading day, with the Nikkei falling more than nine per cent over 2022.
The benchmark Nikkei 225 index edged up 0.83 of a point to 26,094.50, while the broader Topix index fell 0.19 per cent, or 3.56 points, to 1,891.71.
The dollar stood at 132.57 yen, against 132.96 yen in New York on Thursday.
In 2022, the Nikkei lost 9.4 per cent, marking the first annual fall since 2018.
The Tokyo market stayed under pressure as the world experienced a bear market, with Russia's invasion of Ukraine in February prompting the prices of energy and food to soar.
Aggressive central bank rate hikes, notably by the US Federal Reserve, also weighed on investors as inflation took hold in the global economy.
But the Bank of Japan maintained its ultra-easy monetary policy to safeguard the country's fragile economy.
The diverging monetary policies between Japan and the United States drove down the yen against the dollar, making imports such as food and raw materials more expensive.
In October, the yen hit a low of 151.92 to the dollar, as the finance ministry intervened to tame the fluctuations.
Japan's cautious stance on reopening the economy to foreign visitors also delayed the recovery in Tokyo markets.
The Nikkei index moved between an annual high of 29,332.16 on January 5 and a bottom of 24,717.53 on March 9.
Looking ahead, analysts expect a tough start to 2023.
