Tokyo - Tokyo stocks fell 0.38 percent on Tuesday ahead of the US Federal Reserve's next policy meeting, while camera and copier giant Canon sank following a weak profit report.
The Nikkei 225 index at the Tokyo Stock Exchange eased 58.81 points to 15,329.91, while the Topix index of all first-section issues fell 0.18 percent, or 2.28 points, to 1,252.00.
While the Fed's policy committee is expected to wind up its asset-buying programme, dealers will focus on what it says about its plans for interest rates.
“The Fed vigil, as well as recent sharp weakness in Shanghai shares, is combining to dampen Japan investor enthusiasm,” said Tatsunori Kawai, chief strategist at kabu.com Securities.
“Nobody really expects the US central bank to derail the wind-down of its own stimulus programme because of global economic growth fears, but the direction and pace of (a rise in) US interest rates is a real concern.
“How the Fed views future rate moves could go a long way to influencing dollar-yen, and thus Japan stock trading. 'How strong is dollar likely to remain?' is the big question,” he said.
The dollar fetched 107.82 yen in Tokyo afternoon trade, against 107.78 yen in New York Monday afternoon.
Bank of Japan Governor Haruhiko Kuroda repeated his view to lawmakers that its plan to hit 2.0 percent inflation was on track and that the weak yen was a “plus” for the world's number three economy.
The BoJ holds a one-day policy meeting Friday.
But his deputy, Kikuo Iwata, said achieving the inflation target next year cannot be as rigid as a “train schedule”.
Japanese earnings season gets into full swing this week.
Honda shares were down 0.73 percent to 3,306.0 yen.
After the closing bell, the firm said its six-month net profit jumped almost 19 percent, but it cut its earnings outlook for the full fiscal year.
Canon fell 2.45 percent to 3,195.0 yen a day after it said net profit edged down in July-September owing to a slump in demand for digital cameras.
Tokyo Electric Power, the operator of the crippled Fukushima nuclear power plant, fell 2.27 percent to 386 yen on profit-taking after jumping more than 16 percent Monday on reports that it would post a substantial annual profit.
The firm will release its earnings on Friday. (Dow Jones Newswires contributed to this article) - Sapa-AFP