Japan has lodged a strong protest against Beijing's trading curbs on dual-use goods that threaten to impact more than 40 percent of Chinese exports to Japan.
The export control list features more than 800 items, ranging from chemicals, electronics and sensors to equipment and technologies used in shipping and aerospace.
The Nikkei average dropped 1.06 percent to 51,961.98 while the broader Topix index settled 0.77 percent lower at 3,511.34.
Uniqlo brand owner Fast Retailing lost 2.7 percent and chip-testing equipment maker Advantest slumped 4.4 percent.
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