Tokyo stocks slipped 0.31 percent by the break Friday, tracking Wall Street lower and despite a pick-up in the dollar.
The benchmark Nikkei 225 index shed 45.13 points to 14,342.14 in morning trade ahead of a long weekend in Japan, while the Topix index of all first-section shares was off 0.25 percent, or 2.91 points, to 1,181.45.
"Olympics fever is dissipating, and with it momentum," said Tachibana Securities general manager of equities Kenichi Hirano.
"Without much movement in the dollar, activity will be mostly confined to merely 'churning' as opposed to moving up or down."
Japanese stocks soared earlier this week as Tokyo's successful bid to host the Olympics sparked buying of construction and real estate firms, but the rally proved to be short-lived.
Buying was also capped ahead of a long weekend in Japan. Markets will be closed Monday for a national holiday.
"Stocks remain somewhat overheated as well, and with the holiday-extended weekend coming up, players really have no incentive to keep buying," Hiroichi Nishi, SMBC Nikko Securities general manager of equities, told Dow Jones Newswires.
"Regional economic data point to an ever-brighter outlook for a global recovery, however, and so losses will likely be limited."
Sentiment got a modest boost from a monthly government report for September in which Tokyo boosted its assessment of the world's third-largest economy for the first time in two months.
Revised industrial production data was due later Friday.
On currency markets, the dollar bought 99.75 yen, up from 99.47 yen in New York Thursday afternoon but well below the 100.50 yen level enjoyed on Wednesday.
On Wall Street, the Dow fell 0.17 percent.