Share prices closed lower, giving up early gains in the final half hour of trade, with brokers ascribing the late sell off to jitters ahead of the Q1 reporting season. "Stocks rose earlier in reaction to the bullish tone on Wall Street. But caution ahead of a raft of earnings reports by Japanese companies prompted investors to take profits, leaving the benchmark indices in negative territory," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. The Nikkei 225 Stock Average closed down 2.62 points at 11,786.73, its low for the day, marking just the second decline in six trading days. At the start of trade it rose 19 points and advanced throughout the morning, despite data showing that Japan's merchandise trade surplus in June dropped 23.5 pct from a year earlier, the fifth decline in six months. At one point the blue-chip marker hit a fresh 16-week high of 11,867.23, up nearly 78 points from Wednesday's finish. The broader-based TOPIX index of all First Section issues closed down 1.57 points or 0.1 pct at 1,194.76. Decliners outnumbered gainers 827 to 647 with 177 stocks unchanged, on volume of 1.60 bln shares, up from 1.53 bln on Wednesday. Yutaka Miura, senior strategist at Shinko Securities, said the late slump was cause by concern over possible political uncertainty should the Diet's upper house fail to pass postal privatization legislation, the top priority of the government headed by Prime Ministry Junichiro Koizumi