Japan's Nikkei ended nearly flat in choppy trade on Tuesday as festering trade tensions and a stronger yen curbed risk appetite, while extended losses for index-heavy SoftBank Group added to the overall pressure on the market.
The Nikkei share average dropped 0.01% to 20,408.54, after in and out of positive territory. The broader Topix added 0.01% to 1,499.09.
Escalating trade tensions between the United States and China have sapped investor risk appetite and rattled financial markets in the past month. In Japan, the Nikkei has lost 8% since the beginning of May.
Overnight, there was more downbeat news, with the Nasdaq sliding into correction mode as the index lost more than 10% from its May 3 closing record. US factory activity also disappointed, with the US Institute for Supply Management's gauge of manufacturing activity unexpectedly falling in May to the weakest level in more than 2-1/2 years amid global trade tensions.
During Asian trade, the dollar stood 0.1% easier at 107.980 yen after brushing 107.860, its lowest since Jan. 10.
"There are negative catalysts filled in the market such as the poor US ISM, the weak Nasdaq market and a rising yen," said Takuya Takahashi, a strategist at Daiwa Securities.
Fanuc Corp rose 2.2% after dropping 12% over the past month, while Tokyo Electron gained 3.2% after shedding 15%.
A drop in the US technology sector overnight chilled investor sentiment, dragging down SoftBank Group Corp by 3.3%. The stock took a hefty negative 35 points off from the Nikkei, with traders citing concerns about the profitability of its tech-focused Vision Fund.
SoftBank Group stock tumbled 6.2% on Monday after the Wall Street Journal reported that the company's bid to raise a second mega fund has met with a chilly reception from some of the world's biggest money managers. Ono Pharmaceutical dropped 2.3% after Kyodo news reported that Japan's health ministry warned that taking the company's cancer treatment Opdivo or Merck & Co's Keytruda, marketed by MSD in Japan, carried the risk of serious side effects.