Analysts said economic uncertainty continued one month after the earthquake and tsunami, with the Nikkei index at the Tokyo Stock Exchange lost 48.38 points to close at 9,719.70.
The Topix index of all first section shares fell 0.79 points, or 0.09 percent, to 852.34.
Tokyo shares were weighed by profit-taking after the Nikkei's 1.85 percent rise Friday, and as data showed a sharper-than-expected 2.3 percent on-month fall in Japan's February core machinery orders.
Such weakness before the devastating impact of the March 11 disaster on the world's third biggest economy indicated bleak data ahead, said dealers.
"The market is feeling quite nervous. If February is this bad, post-quake March will be even more severe," said Okasan Securities strategist Hideyuki Ishiguro.
He added that the ruling Democratic Party of Japan's defeat in several gubernatorial elections had little impact since Prime Minister Naoto Kan was unlikely to be replaced while the government was focused on reconstruction.
"Investors will seek direction from the US earnings kickoff tonight with Alcoa's report," Yumi Nishimura, deputy general manger of investment strategy at Daiwa Securities, told Dow Jones Newswires.
However TEPCO, the owner of the Fukushima Daiichi nuclear plant that was battered by the quake, jumped 19.04 percent after the Tokyo Stock Exchange imposed a temporarily higher margin-trading rate requirement for new investors.
It was the second straight session in which TEPCO was limit-up.
Toshiba, which might decommission the plant, rose 4.14 percent.
The auto sector dragged on the market, as a Citigroup analyst report stoked worries of further delays in factory restarts despite Toyota, Nissan and Honda all aiming to resume production at all facilities this month.
The brokerage slashed its ratings on Toyota Motor, Nissan Motor and Honda Motor to Sell, saying that the full extent of damage to the supply chain and production disruption from power outages is being underestimated by the market.
Toyota closed down 2.39 percent at 3,260, while Nissan lost 2.38 percent to 697 and Honda slipped 2.22 percent at 2,903.
Sony was down 1.45 percent at 2,576 after it suspended operations at its optical parts and IC cards plant in Miyagi Prefecture in northern Japan following a power outage caused by last Thursday's aftershock.