The benchmark Nikkei 225 index was down 0.34 percent or 73.94 points at 21,491.21 in early trade, while the broader Topix index was down 0.60 percent, or 9.38 points, at 1,565.51.

"Japanese shares are seen moving little, following mixed US stock markets and with a wait-and-see attitude dominating ahead of the Fed chief's testimony," Toshiyuki Kanayama, senior market strategist at Monex, said in a commentary.

The dollar fetched 108.97 yen in early trade, against 108.84 yen in New York late Monday.

Powell is set to testify Wednesday after a strong June jobs report dampened expectations for aggressive Fed action.

Market expectations have shifted to a smaller interest rate cut than had been expected before the jobs data.

Some analysts also think there is a chance the Fed will not cut at all.

In Tokyo, some exporters were weaker with Toyota trading down 0.61 percent at 6,873 yen and electronic parts maker Murata Manufacturing down 1.12 percent at 4,865 yen.

Banks were also lower with Mitsubishi UFJ down 0.49 percent at 525.3 yen and Sumitomo Mitsui Financial down 0.34 percent at 3,817 yen.

On Wall Street, the Dow ended down 0.1 percent at 26,783.49.