The tech-heavy Nikkei ended the day down 0.14% at 50,842.93, after earlier rising as much as 1.18% to a one-week high of 51,513.16.
The broader Topix eked out a 0.13% gain to 3,321.58.
Artificial intelligence-related shares led the Nikkei’s early advance after Wall Street peers rallied overnight amid optimism for an imminent end to the U.S. government shutdown.
But the momentum ebbed in the afternoon, and the benchmark index was down as much as 0.65% at one point.
“There’s no single, big driving force” for stock gains, “and some traders are taking the opportunity to lock in profits”, said Maki Sawada, a strategist at Nomura Securities. The Nikkei rallied to an all-time high of 52,636.87 a week ago, powered by both the global fervor over AI and hopes for fiscal stimulus under new Japanese Prime Minister Sanae Takaichi. The index ended Tuesday with 117 of its 225 components down, compared with 105 that rose and three that ended flat.
AI-focused startup investor SoftBank Group was an early standout, jumping as much as 5.55% before paring gains to 1.98% at the close.
After the bell, the company announced a 4-for-1 stock split along with net profit that greatly exceeded analyst forecasts.
Sony Group climbed 5.51% after reporting robust earnings during the midday trading recess.
Chip-making machinery manufacturer Tokyo Electron and chip-testing equipment maker Lasertec both shed early gains to end the day flat. Advantest sank 4.08%.