Tokyo -Tokyo stocks fell 0.45% Thursday morning, tracking Wall Street's losses on the back of poor US economic data while the dollar's weakness against the yen helped to keep the market in negative territory.
The benchmark Nikkei 225 index, which tumbled 3.83% to a two-month low Wednesday, was off 59.16 points at 12 955.71 by the break.
The Topix index of all first-section shares declined 0.98%, or 10.64 points, to 1 079.39.
Tokyo shares zigzagged in and out of negative territory in the morning as the dollar strengthened against the yen at one stage only to weaken again.
Yen trading and movement in Japanese shares are closely interlinked as the unit's value has a direct impact on exporters' profitability.
Tokyo's dive on Wednesday was largely stoked by disappointment over Japanese Prime Minister Shinzo Abe's latest plans to kickstart the economy, including plans to boost per-capita income by more than a third in 10 years as well as a string of deregulation measures.
"As the Nikkei will likely correct further and has yet to hit the bottom, investors are unlikely to buy very aggressively on dips amid higher volatility," said Yoshihiro Okumura, general manager for research at Chibagin Asset Management.
In forex markets, the dollar was under pressure after weaker-than-expected data ahead of Friday's key non-farm payrolls report, with the Federal Reserve's Beige Book report, a snapshot of the US economy, showing little fresh momentum.
That sparked a drop on Wall Street, with the Dow Jones Industrial Average falling 1.43% to 14 960.59, closing below 15 000 for the first time in a month, as the poor data underscored weakness in the world's biggest economy.
US private-sector payroll figures also showed a worse-than-expected increase in new jobs in May.
In midday Tokyo forex trading, the dollar bought 99.13 yen, up from 99.06 yen in New York on Wednesday.