Japanese Prime Minister Yoshihide Suga will chair a coronavirus meeting later in the day and could further restrict a travel subsidy programme to contain mounting infections.
However, Toyota Motor rose 4.4% as investors welcomed the revamp of its Mirai hydrogen fuel cell car, at a time when the government has stepped up measures to cut carbon emissions.
SoftBank was in the spotlight after it scored a $11.2 billion gain in the value of its stake in DoorDash Inc following the US food delivery app's blockbuster stock market debut on Wednesday.
The benchmark Nikkei share average rose 1.04% to 26,743.52 by the midday break, after declining for three straight sessions. The broader Topix added 0.88% to 1,774.24.
The Nikkei 225 Index ended up a modest 0.03pc at 26,809.37, but settled near its highest since April 1991, while the broader Topix rose 0.07pc to 1,775.25.
The broader Topix rose 1.74pc to 1,637.25, with value-oriented shares gaining 2.20pc, outperforming 1.37pc gain in growth shares of Topix Growth index.
The benchmark Nikkei average dropped plunged 3.47pc to 21,530.95, its lowest since May 27, slipping below a key support of the 200-day moving average, which stood at 21,755.
The benchmark Nikkei average settled 0.75pc lower at 22,305.48, its weakest close since June 1, erasing some of the earlier losses on a positive lead from US futures.