The Nikkei 225 index rose 0.14 percent, or 30.80 points, to close at 21,565.15, but the broader Topix index lost 0.22 percent, or 3.51 points, to 1,574.89.

Wall Street stocks fell for a second straight session on Monday as investors reassessed the prospects for lower interest rates following last week's strong jobs data.

That sent US long-term rates up, prompting the dollar's appreciation against the yen, which helped Japanese investors buy on dips, analysts said.

The dollar changed hands at 108.78 yen in Asian afternoon trade, against 108.75 yen in New York and 108.31 yen in Tokyo on Monday.

The focus now turns to the release of minutes from the Fed's June policy meeting and the two-day congressional testimony of central bank boss Jerome Powell.

"We want to see if Powell will adjust his stance on rate cuts after watching last week's strong jobs report," said Daiwa Securities chief technical analyst Eiji Kinouchi.

"It's hard to trade actively before we see what he says," Kinouchi told AFP.

Tensions in the Middle East were among negative factors weighing on the market, analysts said.

Iran on Monday breached a uranium enrichment cap set under a 2015 nuclear deal and warned Europe against taking retaliatory measures, as France decided to send an envoy to Tehran to try to calm tensions.

In Tokyo, oil sector shares were higher as oil refiner Idemitsu Kosan jumped 2.08 percent to 3,185 yen with crude developer Inpex up 0.66 percent at 964.1 yen.