Earlier in Asia, the Nikkei 225 index closed down 0.5 percent at 13,388.86. But gains were posted elsewhere in Asia. Hong Kong's Hang Seng rose 0.2 percent to 21,668.90. South Korea's Kospi gained 1 percent to 1,926.36. Australia's S&P/ASX 200 added 0.8 percent to 5,135.
Manufacturing in the world's No. 3 economy rose 1.6 percent in July from a year earlier and 3.2 percent from the month before. While that pointed to an economic recovery, analysts had expected to see a 3.6 percent increase.
Energy prices, meanwhile, continued to retreat from a two-year high.
Benchmark oil for October delivery was down $1.31 to $107.41 per barrel in electronic trading on the New York Mercantile Exchange.In currencies, the euro was down 0.24 percent at $1.3205. ___ Associated Press Business Writer Pamela Sampson contributed to this report. Follow Sampson on Twitter at http://twitter.com/pamelasampson