Japan's Nikkei share average fell for a sixth straight day on Tuesday, if only by 0.1%, after the Bank of Japan decided against additional easing measures at its policy meeting.
The yen, which strengthened slightly on the announcement, provided support to exporters that had been heavily sold.
The benchmark Nikkei ended down 8.24 points at 9,538.02, marking its longest losing streak since July 2009.
The index remained above its 50% retracement of its fall from February to November last year near 9,511, seen as a technical support level.
Strategists said the BOJ's decision to keep monetary policy steady was expected, but there was selling among disappointed investors who had hoped for some asset-buying similar to the bank's action in February.
"Despite the overall market expectation that the BOJ would not act at their meeting today, there was still some anticipation in the morning and you can see those gains now reversing," said Eiji Kinouchi, chief technical analyst at Daiwa Securities.
Market participants widely expect the central bank to expand its asset-buying programme and take other measures to support the economy when it issues its economic outlook and price forecasts on April 27.
The broader Topix index was off 0.03% at 813.43.
"It is not like the market is going to continue to fall on the news from BOJ," said Makoto Kikuchi, CEO of Myojo Asset Management, adding that the focus had now turned to US corporate earnings this week.
US aluminum giant Alcoa Inc will kick-start the Wall Street earnings season later in the day, followed by financial heavy weights JP Morgan Chase & Co and Wells Fargo & Co later this week.
"There are still plenty of investors globally who are looking to buy Japan after a correction... But any chance of testing the upside on expectations for Japan's corporate earnings recovery will only last to the end of this month," said Kikuchi.
In Tokyo, exporters were still in demand, with Toyota Motor Corp, Honda Motor and Nissan Motor Co up between 0.5 and 1.5%.
Sharp Corp shed 4.3% after a Nikkei report said the electronics maker was expected to post a wider net loss for the 2011 fiscal year than previously projected, hurt by poor sales of televisions and solar cells.
A source also told Reuters on Tuesday that Sharp was seeking more partners to buy stakes in its main LCD production facility in western Japan in a bid to spin off the subsidiary.
"The overall feedback from long-term investors is that there is no long-term story in place which can justify taking a two-to three-year position on Sharp," a dealer at a foreign bank said.
Trading volume rose, with 1.9 billion shares changing hands on the main board, up from 1.6 billion shares on Monday.
Short Autos
The auto sector outperformed the broader market but Nomura recommended investors short the sector, citing a halt in yen weakness.
"With the market's risk-on sentiment fading, we think high-beta sectors including automobiles and transport equipment could see spreading profit-taking in the near term," it said in a report.
"Although sector valuations continue to look relatively low, we have lowered our stance on the sector to short in view of a halt in yen depreciation, with which sector performance is closely correlated, and of signs from a technical perspective that the sector could soon enter a correction phase."
The transport equipment sub-index, home to Toyota and Nissan, rallied 32% in January-March, outperforming a 19.3% rise in the Nikkei, although it is down 6.2% since the start of April.
Financials also bounced, with Mitsubishi UFJ Financial Group Inc gaining 0.8% in heavy volume, while Japan's top investment bank, Nomura Holdings Inc, climbed 0.8%, lifted by a target price hike by Bank of America Merrill Lynch.
