Tokyo stocks closed down Tuesday following losses on Wall Street and the suspension of a domestic tourism campaign over record numbers of virus infections.
The benchmark Nikkei 225 index lost 0.17%, or 44.60 points, to 26 687.84, while the broader Topix index slid 0.47%, or 8.47 points, to 1 782.05.
"Market sentiment was dampened by declines in US shares overnight," Toshikazu Horiuchi, a broker at IwaiCosmo Securities, told AFP.
On Monday Wall Street closed mostly lower amid renewed concern that soaring Covid-19 infections will lead to more lockdowns in the fragile US economy.
Sentiment also deteriorated after Japanese Prime Minister Yoshihide Suga on Monday urged citizens to reconsider holiday travel plans, announcing a temporary halt to the controversial "Go To" travel campaign.
The call came as Japan sees around 3 000 new cases per day, with doctors and nurses warning they are overwhelmed.
The dollar fetched 104.08 yen in Asian afternoon trade, against 104.00 yen in New York late Monday.
In Tokyo trading, airline companies fell sharply with ANA Holdings dropping 7.85% to 2 275.5 yen and Japan Airlines down 3.42% at 1 944 yen.
Sony lost 0.54% to 9 730 yen and Toyota fell 0.59% to 7 905 yen but Honda gained 0.75% to 3 061 yen.