Japanese equities declined on Thursday as worries over North Korea continued to dour sentiment, while poor earnings from convenience-store operator such as Lawson Inc dragged the retail sector.
Geopolitical risk remains on investors' minds after North Korea test-fired an intermediate-range ballistic missile toward Japan on Tuesday.
Mirroring the concerns, Asian shares dropped with the MSCI's broadest index of Asia-Pacific shares outside Japan down 0.1 percent.
Investors are now focused on major events this week such as U.S. jobs data and the Group of 20 nations' meeting in Germany.
U.S. President Donald Trump is expected to hold his first meeting with Russia's Vladimir Putin as well as meet his Chinese counterpart Xi Jinping.
The Nikkei dropped 0.36 percent to 20,008, and the broader Topix shed 0.1 percent to 1,616.
Lenders and retailers were the biggest drag on the Nikkei.
Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group declined 0.7 percent each.
Lawson Inc shed 3.4 percent after its operating profit dropped 6.9 percent in the first quarter ended May while Ministop Co stumbled 3.9 percent after it posted an operating loss of 269 million yen.
