The Nikkei 225 Index hovered around the flatline on Monday, lacking clear direction as gains in industrial and consumer stocks were offset by weakness in technology shares.
The moves reflected continued rotation away from tech companies into other sectors amid mounting concerns over the sustainability of the artificial intelligence trade.
Investors have also grown wary of excess capacity and intensifying competition among AI providers, particularly from China.
Declines in technology and AI-related stocks were led by Kioxia Holdings (-3.6%), Taiyo Yuden (-7.3%) and SoftBank Group (-4.5%).
Meanwhile, Mitsubishi Heavy Industries (5.4%), Shin-Etsu Chemical (2.7%) and Fast Retailing (1.7%) posted solid gains.
Investors are now awaiting a series of key economic reports this week, including household spending, PPI and machine tool orders data.