The benchmark Nikkei 225 index slipped 0.18 percent or 38.12 points at 21,647.78 in early trade, while the broader Topix index fell 0.18 percent or 2.76 points at 1,573.55.

The yen's relative rise made Tokyo players wary, but the strength of US shares provided support for the market, Okasan Online Securities said in a commentary.

The dollar stood at 107.90 yen, little changed from 107.87 yen in New York. The unit stood at 108.34 yen on Friday, before the long weekend in Japan.

Overnight, the Dow finished 0.1 percent higher at 27,359.16, lifted by investors' expectations that the Federal Reserve would offer a rate cut at the end of the month.

"The Tokyo market is seen well supported," Okasan said in the note.

"At the start of the trading week, the yen's rise against the dollar should weigh on the market. But US shares, as they renew record highs each day, are providing strong support for the Tokyo market," the brokerage said.

For the time being, the Nikkei should stay within a narrow band of 21,500-21,800, it added.

Among major shares, exporters slumped.

Sony dropped 2.76 percent to 5,882 yen in early trade, while Nintendo fell 0.31 percent to 41,520 yen.

Mitsubishi UFJ Financial Group fell 0.82 percent to 523.3 yen.

But automobile shares rose. Toyota rose 1.58 percent to 7,019 yen. Nissan added 0.59 percent to 780 yen.

Honda shed earlier losses and edged up 0.02 percent to 2847.5 yen.