Japan's Nikkei average took a breather on Monday after gaining more than 5 percent the previous week, as exporters such as Canon Inc slipped on a slightly stronger yen.
But domestic demand-reliant shares such as property firms supported the market as investors put money into stocks that are less sensitive to currency moves, said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.
Retailers such as Fast Retailing and Isetan also managed to defy the downward mood.
Investors are standing on the sidelines after the market rebounded last week and on emerging concerns about a stronger yen, he said.
Technical indicators tell us we can expect to be at the levels we are at now, but the question is whether the market can go up further. For now, we don't have enough trade material for that.
Ogawa said Japanese stocks' further rise depends on a stabilizing yen and whether there will be a U.S. stock market rally at the end of this month on the back of a widely expected rate cut as the Japanese market lacks domestic trading impetus.
The Nikkei average fell 0.3 percent or 51.70 points to end at 15,628.97. The benchmark added 5.3 percent last week, its biggest weekly percentage gain since August.
The broader TOPIX index was flat at 1,532.16.
The dollar fell 0.5 percent from U.S. trade late last week to near 110.53 yen but was still above the 2-1/2-year low of 107.22 yen hit early last week.
Investors also held back ahead of a series of U.S. economic data, including reports on the economy from the Institute for Supply Management, Ogawa said. The U.S. jobs report will be out on Friday.
Trade was moderate on the Tokyo exchange's first section, with 2.1 billion shares changing hands, compared with last week's average of 2.2 billion.
Advancing shares outnumbered decliners by 958 to 641.
Masayoshi Okamoto, head of dealing at Jujiya Securities, said that the government data out before the open was unlikely to have had any impact on Monday's trade, but that the figures were important long-term indicators of the health of the economy.
A Ministry of Finance survey released before the open showed Japanese companies reduced spending on plant and equipment by 1.2 percent in July-September compared with the same quarter a year earlier.
Shares of exporters put the market under pressure, with Canon down 0.9 percent at 5,760 yen and Sony Corp shedding 0.8 percent to 5,960 yen.
The U.S. Dow and S&P 500 rose on Friday, but tech stocks were left behind after Dell fell by its most in seven years after a disappointing outlook, driving a 0.3 percent drop in the tech-heavy Nasdaq for the day.
But Fast Retailing, the owner of Uniqlo brand shops, shot up 3.3 percent to 7,540 yen.
Retailers Seven & I Holdings Co Ltd rose 2.2 percent to 2,835 yen and Isetan added 1.9 percent at 1,645 yen.
Property firms also gained as investors continued to buy into the beaten-down sector, which depends on domestic demand.
Investors must be relieved that the sector went back into an upward trend last week along with the Nikkei average and that downside pressure has receded, said Kenichi Hirano, operating officer at Tachibana Securities.
But those shares have been rising a lot, and I don't expect them to advance as they did last week.
Mitsui Fudosan Co Ltd was up 0.2 percent at 2,845 yen and Sumitomo Realty & Development Co Ltd added 0.3 percent to 3,360 yen.
Among stocks that were sold, Sekisui House Ltd skidded 5.2 percent to 1,342 yen after the home builder cut its full-year outlook due to a weak housing market.
The company now expects 112 billion yen ($1.0 billion) in operating profit for the year ending in January, from 118 billion yen in the previous forecast.
(Editing by Malcolm Whittaker)