Tokyo stocks opened 0.68 percent lower on Tuesday with investors cautious after falls on Wall Street, a pause in the yen's decline and ahead of corporate earnings reports by major Japanese firms.
The Nikkei 225 index at the Tokyo Stock Exchange, which lost 0.94 percent Monday, fell another 73.30 points to 10,751.01 at the start.
The benchmark index was likely to trade in a narrow range Tuesday as it continued to consolidate after recent gains, traders said.
"With US markets mostly lower and the yen showing little net movement from the prior day's close, stocks are likely to be range-bound after first exhausting the selling pressure seen Monday," said SMBC Nikko Securities general manager of equities Hiroichi Nishi.
Investors were also cautiously awaiting earnings results by major Japanese companies later this week.
US stocks finished Monday mostly lower despite a stronger-than-expected manufactured durable goods report and a nearly 2 percent gain by Caterpillar after it posted a big year-on-year drop in quarterly profit but suggested business could pick up in the second half of 2013.
At the close, the Dow Jones Industrial Average was down 0.10 percent to 13,881.93.
The dollar was at 90.47 yen in early Asian trade against 90.82 yen in New York Monday afternoon.
The euro fetched 121.64 yen and $1.3446, compared with 122.20 yen and $1.3454 in US trade.
-- Dow Jones Newswires contributed to this article --