Tokyo stocks fell 0.46 percent Tuesday morning after a Wall Street sell-off, while exporters were hit by a stronger yen.
The benchmark Nikkei 225 index eased 70.98 points to 15,308.46 by the break, while the Topix index of all first-section shares slipped 0.44 percent, or 5.61 points, to 1,274.26.
"The market had been resilient to external pressures such as the dollar and overseas equities prices due to the demand from domestic pension funds and overseas ... funds -- but this has tapered off," said Yutaka Miura, senior technical analyst at Mizuho Securities.
"Bargain-buyers are still likely to provide a measure of downside support, but the Nikkei's upside is going to be limited unless another class of investors come in to push the market higher," he added.
The Tokyo market has been boosted by expectations Japan's national pension fund -- the world's biggest -- would shift more of its bond-heavy portfolio into stocks at home and abroad, as managers search for higher returns.
The fund posted a quarterly loss between January and March, its first in almost two years, beefing up expectations of the move into stocks, which could usher in another surge in the Nikkei.
Rakuten Securities senior market analyst Masayuki Doshida told Dow Jones Newswires: "Attention is now turning to US corporate earnings, and the (US Federal Reserve's) stance on monetary policy, especially the pace of stimulus tapering after last week's strong jobs data."
The US central bank is to release on Wednesday minutes of its most recent policy meeting, at which it kept policy on hold as it showed faith in a modest rebound.
US stocks fell Monday, retreating from last week's records as analysts pointed to profit taking and predictions from some experts that the market was due for a pullback.
The Dow fell 0.26 percent to 17,024.21.
In foreign exchange deals the dollar bought 101.78 yen, slightly weaker than 101.87 yen in New York and well down from the 102.11 yen in Tokyo earlier Monday.
In share trading, Uniqlo clothing chain operator Fast retailing slipped 0.50 percent to 33,410 yen, while Sony was down 0.86 percent at 1,715 yen.