Japanes shares steadied on Tuesday after the previous session's sharp losses, though social gaming firm Gree Inc jumped as an upbeat sector report from Bank of America Merrill Lynch forced investors to cover short positions.
The Nikkei closed down 0.1% at 9,464.71 after shedding 1.7% on Monday, falling below the psychological key level of 9,500 on concerns over Spain's ability to finance its debt.
"It's typically schizophrenic at the moment. Yen-sensitive names are getting sold again. But they were bought yesterday, so they will probably be back up tomorrow," a dealer at a European brokerage said.
Toyota Motor Corp , Honda Motor Co ,Sony Corp and TDK Corp lost between 0.4 and 2.3%.
The yen was last traded at 80.395 to the dollar, hovering near a six-week low of 80.29 hit on Monday as fresh concerns over the euro zone debt crisis helped boost the appeal of the Japanese currency.
"There are a lot of concerns in the global financial market but we don't see signs of contagion," said Hisao Matsuura, equity strategist at Nomura.
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Matsuura said Spain's banking system was stable and the situation was different than last year when concerns over a Greek debt default roiled financial markets.
Data on Friday showed Spanish banks had increased their reliance on cheap loans from the European Central Bank as they were virtually shut from the wholesale credit market, raising fears that Spain would be further sucked into the euro zone debt crisis.
Gree soared 9.1% and was the most heavily traded stock on the main board by turnover after Merrill Lynch lifted its price objective on the company and maintained its "buy" rating.
Data from research firm Data Explorers showed more than 88% of Gree's stock that is available to be borrowed had already been on loan as of April 13.
Rival DeNA Co Ltd surged 4.7%.
The broader Topix was down 0.1% at 803.09.
Toshiba tech soars
Toshiba Tec Corp ended up 6.9%, after rallying as much as 10.8%, after a source said the Toshiba Corp unit was in talks to buy IBM Corp's point-of-sale terminal business, which includes cash registers.
Local media put the deal at around $870 million and said it would strengthen the Japanese firm's cloud computing services.
Trading volume on the main board remained thin, with 1.54 billion shares changing hands, up from a three-month low of 1.52 billion on Monday but down last week's average of 1.92 billion.
A trader said investors who are concerned that the market is settling in a range with a break-out possible in either direction could buy both a Nikkei call and put spread to protect their positions.
The Nikkei has fallen 6.1% so far this month after surging more than 19% in January-March as part of a global rally, its best first quarter performance in 24 years.
Stock valuations on the Nikkei at the Monday close imply an earnings-per-share compound annual growth rate of minus 0.1% for the index as a whole over the next five years, data from Thomson Reuters StarMine showed.
That means the market is pricing the index as if EPS growth will be minus 0.1% every year over the five-year period, on a compound basis. This is down from 0.5% last week and 1.5% in mid-March.
Implied five-year EPS CAGR for the S&P 500 is 3.7%.