Tokyo: Japan's Nikkei index declined more than 1% on Monday, retreating from early gains as investors moved to lock in profits following last week's rally of over 4%, while attention shifted toward the upcoming corporate earnings season.

According to Qatar News Agency, the benchmark Nikkei 225 index fell 1.10%, or 457.96 points, to close at 40,998.27, after rising earlier in the session to a high of 41,534.21. The broader Topix index also ended lower, shedding 0.72%, or 21.13 points, to finish at 2,930.73.

In currency markets, the US dollar strengthened against the Japanese yen, rising by approximately 0.27% to 148.02 yen in morning trading. Meanwhile, the yield on 10-year Japanese government bonds fell by about 3 basis points to 1.572%.

Chip-related stocks led the decline. Shares of Advantest dropped 8.96%, or 1,030 yen, to close at 10,465 yen. Screen Holdings also fell sharply, losing 9.74%, or 1,190 yen, to end at 11,030 yen after the chip equipment maker reported a 12.2% decline in quarterly operating profit.