Japanese shares slipped at market open on Friday, as fresh inflation data reinforced expectations for another policy tightening by the central bank.
The Nikkei 225 dropped 789.1 points or 1.2% to 65,427.69.
Core consumer inflation, which strips out volatile fresh food prices, accelerated to 1.8% in July from 1.6% in June.
The sustained uptick keeps the Bank of Japan on course for a potential rate increase as early as September, with market attention now fixed on the timing of its next move.
Overseas, some traders doubt that U.S. bond repurchases will provide more than a short-lived cushion for borrowing costs.
Oil prices edged lower, with Brent at $93.10 a barrel, snapping a five-day winning streak after President Donald Trump escalated pressure on Tehran over a stalled nuclear agreement.
