A raft of Chinese economic data beat market expectations but did not produce notable market reactions as investors had been already optimistic following a recent string of positive China numbers.
The broader Topix index of all first-section issues slipped 0.23 per cent, or 3.30 points, to 1,455.77.
The U.S. dollar retreated to 108.14 yen, its lowest since mid-November before recovering some ground to trade down 0.13 at 108.47 yen.
Trump also said his administration will not label China a currency manipulator in the Treasury Department's semi-annual report on currency practices of major trading partners which is due out on Friday, backing away from a campaign promise.
"We have some U.S. economic data later in the day, which ordinarily would likely have some affect on U.S. yields and the dollar, but with U.S. bond markets closed, it might not have much impact", said Ayako Sera, senior market economist at Sumitomo Mitsui Trust. Data on Friday showed US retail sales fell for a second straight month in March and consumer prices dropped for the first time in just over a year.
The dollar has given up three quarters of the gains it had made after the Trump's surprise election victory had boosted expectations that his stimulus and deregulation plans would buoy USA growth and inflation.
"Concerns about U.S. -Sino trade frictions have eased for the time being", said Naoki Tashiro, the president of TS China Research.
VP Pence makes surprise visit to Korean Demilitarized Zone
Vice President Mike Pence said on Sunday that the country's resolve and commitment to its alliance with South Korea had never been stronger.
U.S. President Donald Trump said on Thursday that North Korea is a problem that "will be taken care of", as China urged caution and speculation rose that Pyongyang might be on the verge of a sixth nuclear test. The market for U.S. Treasuries finished trading early on Thursday, and will be closed Friday.
The dollar index against a basket of major currencies was down 0.2 percent at 100.390, weighed down following the release of Friday's weak U.S. retail sales and consumer prices data and as flight-to-safety drove U.S. Treasury yields to five-month lows.
The United States, its allies and China are working together on a range of responses to North Korea's latest failed ballistic missile test, Trump's national security adviser said on Sunday, citing what he called an worldwide consensus to act.
The euro stood at US$1.0603, little moved so far, and not far from a one-month low of US$1.0570 touched last Monday, with focus on the French presidential election.
The dollar nursed losses on Friday, on track for a losing week as continuing tensions in North Korea underpinned the perceived safe-haven Japanese currency.
Wariness over the first round of the French presidential elections on April 23, another potential source of geopolitical risk keeping global markets nervous, was expected to cap the common currency this week. Two polls put any of the four frontrunners, including far-right candidate Marine Le Pen and hard-left challenger Jean-Luc Melenchon, within reach of a two-person run-off vote. North Korea attempted to test a missile on Sunday, but it exploded shortly after launch.
Benchmark Brent crude futures LCOc1 were down 0.9 percent at $55.40 a barrel.
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