The Nikkei average fell 0.51 per cent today as technology shares declined after their US peers were hit by a profit warning.
The Nikkei shed 78.99 points to 15,473.82, erasing part of its 1.6 per cent gain from the previous session. The broader TOPIX index was down 0.52 per cent at 1,585.85.
Analysts said the Nikkei's sharp gains from the previous session also made some stocks ripe for profit-taking.
Shares of Kirin Brewery dropped after its revised earnings forecast disappointed investors, while Japan Airlines Corp dropped 2.6 per cent to 268 yen after Nikko Citigroup pulled out as one of 15 underwriters for a planned $1.94 billion new share issue - considered a rare move.
US technology stocks fell sharply yesterday after brokerage Merrill Lynch cut its rating on the sector. An earnings warning from data storage equipment maker EMC Corp also hurt sentiment.
"There is growing uncertainty over US technology companies' earnings, and this may be indicating that an economic slowdown is a real thing in the United States," which is a major export market for Japan, said Yoshihisa Okamoto, senior vice president at Fuji Investment Management.