The benchmark Nikkei 225 index was down 0.62 percent or 132.64 points at 21,336.54 in early trade, while the broader Topix index was down 0.59 percent or 9.31 points at 1,558.10.

A higher yen and falls on Wall Street are weighing on the Tokyo market, while investors are "also increasingly taking a wait-and-see attitude ahead of corporate earnings season from next week," Mizuho Securities said in a note to clients.

"Japanese shares are seen sold in early trade then likely to become mixed without a sense of clear direction... after President Trump suggested (on Tuesday) US-China trade talks would take longer" than expected, Mizuho added.

US Treasury yields have moved lower, sending the dollar weaker against its major peers including the yen.

"While there is no single catalyst, weaker stocks overnight, lower oil prices and ongoing concerns about the (US-China) trade spat are all supportive factors," Tapas Strickland, senior analyst at National Australia Bank, said in a commentary.

The dollar fetched 107.88 yen in early Asian trade, against 108.11 yen in New York on Wednesday.

In Tokyo, Canon was down 2.94 percent at 3,070 yen after the business daily Nikkei reported it will revise down its full-year earnings forecasts when it reports half year-to June earnings next week.

Other exporters were also lower, with Hitachi trading down 1.18 percent at 3,920 yen and Sharp down 2.68 percent at 1,378 yen.

Japan's trade surplus dropped 19.0 percent year-on-year to 589.5 billion yen ($5.46 billion) in June, as falls in exports -- particularly ships and auto parts -- overwhelmed falls in imports, according to official data issued 10 minutes before the opening bell.

The country's politically sensitive trade surplus with the US rose 13.5 percent to 669.9 billion yen chiefly due to a rise in exports of chip-making equipment and automobiles, the finance ministry said.

On Wall Street, the Dow ended down 0.4 percent at 27,219.85.