Japan watchers say the pull-back in the Nikkei is a correction from the steep rise to 5-1/2 year highs hit less than a week ago, rather than a sign of concern over the economic policies being pursued by Prime Minister Shinzo Abe.
Still, they add that the Nikkei may not resume its climb until there is fresh reason to do so – either in terms of economic data showing solid signs of activity or concrete measures from the government to boost Japan's long-term outlook that may come after elections to the Upper House of parliament in July.
(Read More: Here's What's Different About This Market Rout)
"The [current] mood in the Tokyo equity market is a reaction to the sharp rise we have seen in the past six months, during which market participants have ignored bad news and taken in most of the good news," Yuuki Sakurai, president and CEO at Fukoku Capital Management Job said on CNBC's "Cash Flow."
"After breaching 15,000, we got those comments from Ben Bernanke [on possible Fed tapering] and some weak news out of China, people started to say it's time to take profits…So we might see this pessimistic mood prevail until we see the results of the Upper House elections in July," he added.
— By CNBC.Com's Dhara Ranasinghe; follow her on Twitter @DharaCNBC