TOKYO: Japanese stocks fell Wednesday morning after US aluminum producer Alcoa's quarterly earnings missed expectations, while Slovakia's failure to extend Europe's bailout fund added to downward pressure.
Floods in Thailand also hit Japanese manufacturers who had to suspend their operations there.
The Nikkei index at the Tokyo Stock Exchange lost 0.67 percent or 58.58 points to 8,715.10 in the early session. The Topix of all first section shares fell 0.65 percent or 4.88 points to 750.12.
Asian bourses turned cautious after Alcoa's earnings for the third quarter missed Wall Street's expectations as it kicked off the corporate earnings reporting season.
"Markets will trade with a cautious tone keeping one eye on earnings and the other on developments in the eurozone," said Mitul Kotecha, strategist at Credit Agricole.
"As we have noted, expectations of some concrete action by officials to help resolve the crisis in the eurozone by the end of the month are a key driving force for markets," he said.
The Thailand floods forced some of Japan's biggest firms to halt production, driving down their shares, said Kenichi Hirano, operating officer at Tachibana Securities.
The Tokyo bourse was also vulnerable to profit taking after three consecutive days of gains, analysts said.
Among firms that suspended Thai operations, Toyota Motor dropped 1.46 percent to 2,552 yen and Honda Motor lost 2.89 percent to 2,279 yen.
Nikon, which produces lenses and single-lens reflex cameras in Thailand, plunged 5.15 percent to 1,749 yen on investor concerns about the potential impact of the floods on earnings as it prepares for the year-end shopping season.
"Even if the company issues somewhat conservative guidance (for the second half of the fiscal year), it will clearly be unable to avoid an earnings impact," Credit Suisse analyst Hideyuki Maekawa wrote in a note to clients.
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