TOKYO: Tokyo stocks edged 0.16 percent lower on Wednesday as investors braced for crucial European leader summit on tackling the region's debt crisis, while a stronger yen hit investor sentiment.
The benchmark Nikkei index at the Tokyo Stock Exchange declined 13.84 points to close at 8,748.47. The Topix index fell 0.16 percent, or 1.22 points, at 746.48.
European leaders are scheduled to meet in Brussels later Wednesday amid hopes they will sign off on concrete measures to boost confidence in the eurozone after months of indecision and uncertainty that have drawn sharp criticism from other global powers.
The eurozone wants to beef up its 440-billion-euro ($610 billion) rescue fund, the European Financial Stability Facility, to persuade markets it has the means to protect highly indebted nations such as Greece and Italy.
Leaders also want to agree on a huge write-down on bondholders' debt of stricken Greece and make sure banks have enough reserves to withstand losses.
But analysts said a final agreement could yet be delayed.
The cancellation of a European Union finance ministers' meeting scheduled before the summit Wednesday concerned those expecting a resolution to the sovereign debt crisis, National Australia Bank said.
"There was always a risk of disappointment, and there may be a last minute 'rabbit out of the hat' moment, but this is increasingly unlikely," it said in a note.
US stocks sank Tuesday on indications of a still-weak economy and worries over Europe on the eve of the European summit, with the Dow Jones Industrial Average tumbling 1.74 percent.
The dollar was hovering around 76 yen in late Asian trade on Wednesday after touching a new post-war low of 75.73 yen briefly in New York on Tuesday.
Japanese exporters' were lower. Toyota fell 0.31 percent to 2,528 yen while Honda dropped 0.55 percent to 2,329 yen.
The firms are among many Japanese companies hit by supply constraints due to flooding in Thailand, forcing the temporary closure of production plants there.
Olympus dived 7.56 percent to 1,099 yen.
The firm is mired in controversy after it removed chief executive officer Michael Woodford when he questioned the size of advisory fees paid during a purchase of a British firm, and other deals made between 2006 and 2008.
Olympus has lost around half its value since Woodford lost his post.
Hitachi added 3.66 percent to 424 yen after it revised its half-year net profit forecast five times higher, citing a smooth recovery from the March earthquake and tsunami.
On the Osaka Securities Exchange, Nintendo fell 4.19 percent to 11,180 on a Nikkei daily report that it will likely post a first half group pre-tax loss of about 100 billion yen -- nearly double an earlier forecast -- compared to a pre-tax loss of 4.1 billion yen it recorded for the same period last year.
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