The Nikkei 225 at the Tokyo Stock Exchange slipped 43.58 points to 17,961.19, while the Topix index of all first-section shares was flat, edging up 0.41 points to 1,459.84.
The Japanese market, which hit a more than seven-year high on Monday, was also weighed by a stronger yen.
The dollar bought 118.37 yen compared with 118.47 yen in London late Monday. The breakdown in Greek debt talks hit the euro, which sank to $1.1346 and 134.32 yen from $1.1390 and 134.53 yen. US markets were closed Monday for a public holiday.
The crunch meeting Monday of eurozone finance ministers broke down after Athens refused demand that it must apply for an extension to its bailout, raising the prospect Greece will run out of cash and default, forcing it to leave the currency bloc.
Eurogroup head Jeroen Dijsselbloem said the country had the rest of the week to make the request, with the 240 billion euro lifeline expiring at the end of the month.
Greece’s new far left-led government came to power last month on a platform of overhauling the terms of the austerity-laden financial aid package, which it says has crippled the economy.
However, the 18 other eurozone nations, led by Germany, say any changes must pass within the current programme.
“Because the discussions didn’t go well in Greece, those concerns are pulling the market down,” Naoki Fujiwara, chief fund manager at Shinkin Asset Management, told Bloomberg News.
“However, people have hopes that there’s a safety net for Greece and it won’t default. They’ll compromise someway. So there’s buying on dips.”
In Tokyo share trading Fast Retailing, operator of the Uniqlo clothing chain, fell 0.62 percent to 43,790.0 yen, Japan Tobacco was down 2.29 percent at 3,640.0 yen and factory robotics giant Fanuc rose 0.25 percent to 22,445.0 yen. -AFP