Nikkei average drops

Japan's Nikkei average dropped on Tuesday, as concerns about global trade revived after US President Donald Trump slapped tariffs on Brazil and Argentina, while weak US manufacturing data also dented sentiment.

The Nikkei share average closed down 0.64% at 23,379.81. It had fallen as much as 1.46%, to 23,186.84, but managed to end the day above its 25-day moving average of 23,249, a key technical level.

On Monday, Trump said he would impose tariffs on steel and aluminium imports from Brazil and Argentina, raising worries he could also re-escalate trade tensions with China.

"Should Trump impose the so-called fourth tariffs on China on Dec. 15, it would be a completely different scenario from what most investors are expecting," said Masayuki Kubota, chief strategist at Rakuten Securities.

Data from the US Institute for Supply Management (ISM) showed the US manufacturing sector contracted for a fourth straight month in November, hurting market optimism sparked by a strong manufacturing survey reading from China on Monday.

China banned US military ships and aircraft from visiting Hong Kong and slapped sanctions on several US non-government bodies in response to US legislation passed last week supporting protests in the Asian financial hub.

Investors have hoped that, as part of a "phase one" trade deal, Washington would avoid imposing an additional tariff of 15% on about $156 billion worth of Chinese products on Dec. 15.

The broader Topix shed 0.45% to 1,706.73. A wide range of shares dropped on the main board, with decliners outnumbering gainers by a ratio of 74 to 26.

Decliners included many defensive shares. East Japan Railways fell 1.3%, Kikkoman Corp dropped 3.4% and Nisshin Group shed 2.7%.

Pigeon tumbled 13.8% after the baby goods maker slashed its annual outlook following weak quarterly results.

Astellas Pharma fell 1.1% after the drugmaker agreed to buy Audentes Therapeutics Inc for about $3 billion in cash, in a quest to make genetic medicines a key growth area.

Nomura Holdings briefly hit a 1-1/2-year high after Japan's top securities brokerage firm and investment bank picked joint operations chief Kentaro Okuda to lead its turnaround.

But it failed to retain gains, ending down 0.3%.

Shares of Nintendo rose 2.7% to a 1-1/2-year high, on hopes of brisk holiday sales.