The Topix index slipped 5.70 points, or 0.67 percent, to 841.46. Despite news that a leak of highly radioactive water into the sea from Tokyo Electric Power's stricken Fukushima Daiichi plant had been stopped, shares in the embattled utility were down 15.47 percent in morning trade. TEPCO plunged to its lowest ever close on Tuesday amid concerns it will face mounting compensation bills. Dealers had said investors would be keeping an eye on Chinese markets after an expected rate hike Tuesday, in Beijing's latest effort to curb rampant lending and bring inflation under control. Wall Street offered a weak lead overnight, with the Dow Jones Industrial Average slipping 0.05 percent. Traders digested news that the Federal Reserve was edging towards ending years of ultra-loose monetary policy in the face of a building US recovery and looming inflation fears.
The Shanghai Composite Index, which covers both A and B shares, was up 21.16 points at 2,988.57, led by resources stocks tracking higher commodity prices overnight, dealers said. Analysts said the Chinese central bank's latest interest rate hike at the end of a holiday weekend may have limited impact on the market as the move was largely in line with expectations. The bank said Tuesday it would raise one-year deposit and lending rates by 25 basis points. The yen slid further in Asia, amid expectations the Bank of Japan will maintain easy monetary policy as the Fed signals possible tightening. The Japanese central bank began a two-day meeting to assess its next step in soothing an economy.
The yen traded at a more than six-month low of 85.42 to the dollar from 84.84 in New York. It was at 121.84 yen to the euro from 119.75 yen. The euro was at $1.4257, from $1.4152. World oil prices fell from two-and-a-half year highs in Asia as traders reaped gains from the rally. New York's main contract, light sweet crude for May, fell 45 cents to $107.89 per barrel. Brent North Sea crude for May delivery retreated 55 cents to $121.67 after touching $122.89 in intraday trade Tuesday, its highest level since August 2008, before closing at $122.22. Gold opened at $1,454.00-$1,455.00 an ounce in Hong Kong, up from Monday's close of $1,433.00-$1,434.00.