The Nikkei rose 0.59% to 27,585.91, reversing its earlier losses when it hit its lowest level since July 30. The broader Topix rose 0.44% to 1,923.97.
The index of long-battered Mothers start-up shares rebounded after hitting one-year lows earlier in the session.
The gains were led mainly by defensive shares while many cyclical shares slipped on continued worries the spreading Delta variant could disrupt economic recovery, both at home and abroad.
Fujifilm rose 3.3% to a record high, extending its rally since its brisk earnings announced on Friday.
Some defensive shares such as pharmaceutical companies were also among the top gainers, with Astellas Pharma up 2.1% and Chugai Pharmaceutical gaining 1.1%.
But many cyclical shares fell on rising growth concerns as many countries struggled to contain the Delta variant of the coronavirus.
Steelmakers lost 0.9% while Shippers, which had risen about 50% in less than three weeks on the back of a red-hot freight market, lost 1.4%.
“There are rising worries the world economy could slow down next year due to variant,” said Masayuki Kubota, chief strategist at Rakuten Securities.
US retail sales fell more than expected in July while Japan on Tuesday extended its state of emergency in Tokyo and other regions and to counter a spike in COVID-19 infections that is threatening the medical system.
Elsewhere, Pan Pacific International lost 6.0% after the retailer’s quarterly earnings fell short of market expectations.
