The Nikkei dropped 1.0 percent to 14,764.31 in mid-morning trade after touching as low as 14,711.48 earlier, the lowest since Nov 14. It fell 7.8 percent for the last week hit by concerns about a sell-off in emerging market assets.
For the month of January, the benchmark fell 8.5 percent, its worst monthly percentage decline since May 2012.
On Friday, European and U.S. markets took a hit while the Russian rouble and the Turkish lira came under renewed pressure in the currency markets.
Analysts said that they had expected a sharper sell-off in Tokyo on Monday after seeing the Nikkei futures closed at 14,610 in Chicago. But they said that sentiment has been helped as the dollar is trading above 102.20 yen, above an eight-week low of 101.77 yen hit last Monday.
"Unless the dollar falls below 102 again, the Japanese market should be supported. Also, most people expect strong earnings from major Japanese companies this week," said Hikaru Sano, a senior technical analyst at Daiwa Securities, adding investors will not likely take large positions until U.S. jobs data are released this Friday.
EARNINGS-RELATED NAMES GAIN
Traders also said that Sunday's Super Bowl has kept trading subdued.
"Foreign investors cannot worry about trading now, they are glued to the game," a trader at a foreign brokerage said. "Short-term investors and retail investors are picking up earnings-related stocks today."
The Topix shed 1.0 percent to 1,208.53.
Index-heavyweight stocks were mostly weak, with SoftBank Corp (9984.T) falling 2.2 percent and was the most traded stock by turnover, while Fast Retailing Co dropping 2.3 percent.
Sony Corp shed 1.9 percent to the lowest since May 2013 after Japanese broadcaster NHK reported on the weekend that the company and Lenovo Group are in talks about a possible joint venture to take over Sony's loss-making Vaio PC business overseas. Sony called the report inaccurate while acknowledging that it was looking at various possibilities for the unit.
"The report basically gave the market a muted reaction. Sony has been weak since last month's Moody's downgrade," said a fund manager at a Japanese asset management firm. "If the company is selling its poorly-performing PC business, the stock price will likely rise."
Bucking the weakness, Shiseido Co rose 2.8 percent after the cosmetics company raised its earnings forecast for the year ending March. It now expects an operating profit of 42 billion yen, up from previously forecast 40 billion yen and sales of 750 billion yen, up from 740 billion yen.
Fanuc Corp gained 3.3 percent after the factory automation robot maker said its orders for the Oct-Dec quarter was bigger than the market expected.
The JPX-Nikkei Index 400, an index launched this year comprised of firms with high return on equity and strong corporate governance, shed 0.9 percent to 10,939.71.