Tokyo stocks have closed 0.24 per cent lower following losses on Wall Street, while the stronger yen hit exporters.
The benchmark Nikkei 225 index eased 33.08 points to 14,042.17, while the Topix index of all first-section shares fell 0.29 per cent, or 3.33 points, to 1,150.05.
"The 14,000 mark is proving to be a somewhat reliable support level for the time being," said Yoshihiro Okumura, general manager at Chibagin Asset Management.
"But with the pressure of a weaker dollar not looking like it will subside in the face of declining US Treasury yields, it would not be a surprise to see an eventual Nikkei breakdown to the 13,500 level."
A rise in the yen against the dollar dents the profitability of Japanese exporters such as Toyota and Sony and, in turn, tends to weigh on their shares.
Shortly before the opening bell, official data showed Japan's trade deficit narrowed 7.8 per cent on-year in April, but that appeared to have little impact as investors focused on a Bank of Japan policy meeting.
The central bank said it would hold fire on expanding its monetary easing campaign and added that the world's number three economy was picking up pace, despite fears a sales tax rise will dent consumer spending.
The yen strengthened after the announcement, with the dollar buying 101.18 yen, from above 101.30 yen before the statement.
While the BoJ move was expected, analysts said there may be more downside in store for the Nikkei.
"With dollar-yen also breaking down below its 200-day moving average, the signs are lining up for more potential weakness," Chris McGuire, chief executive of Chicago-based hedge fund Phalanx Capital Management, told Dow Jones Newswires.
"We were 'long and wrong' through April, but have had to revise that position - there may be more market weakness ahead."
Traders are now keeping tabs on a news conference by BoJ governor Haruhiko Kuroda, looking for clues about when it might announce further policy measures.
Some exporters lost ground with Canon falling 1.31 per cent to 3,296 yen. Sony, which is to hold a business strategy briefing after Thursday's market close, was down 0.67 per cent to 1,614 yen.
On Wall Street, shares slumped on a batch of mostly disappointing retail earnings and after a US Federal Reserve official called for a speedy rise in benchmark interest rates.
The Dow sank 0.83 per cent, the S&P 500 fell 0.65 per cent and the Nasdaq lost 0.70 per cent.
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