The Nikkei ended 0.3% lower at 20,330.19, moving away from a two-year high of 20,481.27 hit last week. In response, he said that Pyongyang could target and shoot down United States bombers even if they are not in North Korea's airspace. The broader Topix was flat at 1,672.74.
The yen stood strong as tensions between North Korea and the USA flared up escalating tensions, while the euro struggled near 4-week lows versus the dollar. Internet giant Tencent (700.HK) slumped as much as 3.8%, mirroring the slide of U.S internet stocks overnight, but eventually recovered to close just over 1% down at HKD 338 a share.
Traders pushed into the yen as North Korea accused US President Donald Trump of declaring war against it and said it reserved the right to shoot down US bombers even if they are in global airspace.
Benchmark Tokyo rubber futures edged lower on Tuesday, coming under pressure from a stronger yen against the dollar, brokers said.
On Wall Street, the Dow Jones Industrial Average (.DJI) fell 11.77 points, or 0.05 percent, to 22,284.32, the S&P 500 (.SPX) gained 0.18 points, or 0.01 percent, to 2,496.84 and the Nasdaq Composite (.IXIC) added 9.57 points, or 0.15 percent, to 6,380.16.
Spot gold (XAU=) dropped 1.1 percent to $1,295.60 an ounce.
Bucking the weakness, Nippon Telegraph and Telephone Corp rose 2.0 percent after the company said that it will buy back up to 30 million of its own shares, or 1.5 percent of outstanding stocks. This suggests the index may correct further.
"We made a decision to change to September 29 after they expressed their concerns", said Kazuhiro Nishimukai, director of information services at the Tokyo Stock Exchange.