Tokyo stocks fell Thursday on profit-taking as Donald Trump's decision to sign a bill supporting Hong Kong's rights cast doubts over the US-China trade deal.
The benchmark Nikkei 225 index lost 0.12 percent, or 28.63 points, to close at 23,409.14, snapping a four-day winning streak. The broader Topix index declined 0.17 percent, or 2.92 points, to 1,708.06.
Japanese shares opened higher, tracking another record lead from New York in response to better-than-expected US economic growth data.
But profit-taking emerged as China threatened to retaliate after Trump signed legislation supporting Hong Kong pro-democracy protesters, just as the world's top two economies edge towards a trade truce.
"Investors locked in profits as sentiment was dampened by Trump's decision to sign the legislation," said Toshikazu Horiuchi, a broker at IwaiCosmo Securities.
"Many investors were on the sidelines as fresh news on the US-China issue are unlikely to come for now due to a US holiday," Horiuchi told AFP.
The dollar fetched 109.47 yen in Asia afternoon trade against 109.55 yen in New York.
In Tokyo, China-related stocks fell. Construction machine maker Komatsu lost 0.92 percent to 2,566 yen with electric parts maker Rohm down 0.21 percent at 9,280 yen.
Japan Display plunged 4.22 percent to 68 yen after the firm said it had started an investigation into alleged improper accounting.
Panasonic jumped 2.82 percent to 1,009 yen after a report said it plans to sell its loss-making chip business to a Taiwanese company.