The benchmark Nikkei 225 index was down 0.19 percent or 40.07 points at 20,585.09 in early trade, while the broader Topix index was down 0.32 percent or 4.77 points at 1,506.02.

"Japanese investors are reacting to a trend in the US market and the US manufacturing data," Mizuho Securities said in a note to clients.

"A wait-and-see attitude is seen dominating the market" it added.

Wall Street stocks tumbled Tuesday as new tariffs in the US-China trade war took effect, while US data suggested weakness in the manufacturing sector.

Washington and Beijing imposed new levies on September 1, with the US now levelling 15 percent tariffs on an assortment of consumer goods and China responding with its own duties.

Meanwhile, "against expectations for an unchanged outcome, the US ISM manufacturing index contracted in August clipping the wings of a rising US dollar, (and) also dragging equities," Rodrigo Catril, senior strategist at National Australia Bank, said in a note.

The dollar fetched 105.86 yen in early Asian trade, against 105.94 yen in New York.

In Tokyo, losses were led by exporters, with the auto giant Toyota sliding 0.68 percent to 6,957 yen and its rival Nissan trading down 1.20 percent at 648.4 yen.

Some electronics were also lower, with Panasonic trading off 1.17 percent at 809.7 yen and Sharp down 0.80 percent at 1,111 yen.

On Wall Street, the Dow ended down 1.1 percent at 26,118.02.