Tokyo stocks eased shortly after the opening bell on Monday, as profit-taking kicked in after the key index hit its highest level since the March 2011 quake and tsunami disaster.
The Nikkei 225 index at the Tokyo Stock Exchange was 41.57 points or 0.39 percent lower at 10,646.54 as of 0040 GMT.
The Nikkei had opened 0.52 percent higher, while the Topix index of all first-section issues was 0.74 percent or 6.60 points higher at 895.11.
Tokyo stocks jumped 2.82 percent on Friday, the first trading day of 2013, as the yen tumbled on relief over a US deal to avert the "fiscal cliff" of tax hikes and huge spending cuts.
The Nikkei index ended 2012 at its highest level since the March 2011 quake and tsunami disaster.
"The market sports all the technical signs of being overheated, but the momentum of the falling yen continues to attract investors," SMBC Nikko Securities general manager of equities Hiroichi Nishi told Dow Jones Newswires.
"There are plenty of sellers in the market, but they are overwhelmed by players who are finding that they can't afford to not buy."
The dollar stood at 88.00 yen in early Tokyo trade, compared with 88.15 yen in New York Friday afternoon.
The euro was at 114.95 yen and $1.3054 from 115.19 yen and $1.3067.
US economic data Friday showed a modest 155,000 jobs were added in December, not enough to spark great optimism but showing strength given the unsteady political policy climate of recent months.
In addition the latest ISM index on the service sector showed unexpected growth in December, the fastest in 10 months, led by new orders and employment.
That helped the Dow Jones Industrial Average finish up 43.85 points or 0.33 percent at 13,435.21.