Japanese stocks on Wednesday flitted between positive and negative territory, lacking any clear direction, as investors awaited results of U.S. Senate runoff elections in Georgia that could sway President-elect Joe Biden’s economic policies. Sentiment also weakened as Tokyo and surrounding cities prepare to enter a state of emergency as early as Thursday to curb a spike in coronavirus infections. The Nikkei 225 Index was down 0.31% at 27,073.26 by 0201 GMT, after gaining as much as 0.17% shortly after the opening bell. The broader Topix rose 0.28% to 1,796.56. If Democrat challengers win, it would be easier for Biden to pass big fiscal spending, which is generally considered a positive. A Democrat sweep could also make it easier for Biden to raise corporate taxes, which is a negative for stocks. However, initial results are very close, and Republican candidates could challenge the vote count if they lose. Uncertainty about U.S. politics and the economic impact of business restrictions under a state of emergency could continue to weigh on Japanese shares in the short term. “If we get more clarity on what type of policies will emerge from a Biden administration as a result of the Georgia vote, then the trend for markets could change,” said Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank. “I don’t expect a big sell-off, but Japanese stocks have already rallied so much last year that upside this year will be somewhat limited.” The underperformers among the Topix 30 were Keyence Corp down 1.76%, followed by Daikin Industries Ltd losing 1.34%. The stocks that gained the most among the top 30 core Topix names were Nippon Telegraph and Telephone Corp up 2.82%, followed by Seven & i Holdings Co Ltd gainig 2.27%. There were 124 advancers in the Nikkei index against 95 decliners. The volume of shares traded on the Tokyo Stock Exchange’s main board was 0.49 billion, compared with the average of 1.18 billion in the past 30 days. (Reporting by Stanley White, Editing by Sherry Jacob-Phillips)