Tokyo stocks opened down 0.97 percent on Wednesday, tracking Wall Street lower at the start of the fourth quarter earnings season in the United States as the yen strengthened further.
The Nikkei 225 index at the Tokyo Stock Exchange fell 102.39 points to 10,405.67 at the start.
"Concerns over US earnings reports are acting as a buy inhibitor at the moment, while Japanese shares are still technically overbought," said SMBC Nikko Securities general manager of equities Hiroichi Nishi.
"Alcoa's earnings figures seemed to be encouraging, but Intel's results next week will carry greater weight for Japan tech stocks."
He told Dow Jones Newsires that, with a stronger yen, the market would continue to consolidate. A high yen hurts Japanese exporters as it makes their products less competitive abroad.
Aluminium giant Alcoa reported a big jump in fourth-quarter earnings Tuesday despite lower aluminium prices and a cautious outlook for demand.
The dollar was at 86.87 yen in early Asian trade, down from 86.97 yen in New York Tuesday afternoon and from 87.37 yen a day earlier in Tokyo
The euro also slipped to 113.64 yen from 113.75 in US trade while staying almost flat at $1.3080 after falling on weak economic data from Europe.
The Dow Jones Industrial Average fell 55.44 points (0.41 percent) to 13,328.85 on Tuesday, sinking for a second day as confidence slipped after last week's big gains.