TOKYO: Tokyo stocks closed lower on Tuesday, with investors cautious over geopolitical risks linked to Ukraine and the Federal Reserve's planned interest rate hikes.

The benchmark Nikkei 225 index dropped 1.66 percent, or 457.03 points, to end at 27,131.34, while the broader Topix index tumbled 1.72 percent, or 33.25 points, to 1,896.62.

"Investors became risk-averse due to uncertainties over US monetary policy and the Ukraine situation," Okasan Online Securities said in a commentary.

"As a result, a wide range of stocks, particularly growth stocks, were sold, extending the decline," it added.

US President Joe Biden declared "total" unity among Western powers Monday after crisis talks with European leaders on deterring Russia from an attack against Ukraine, as 8,500 US troops were put on standby for possible deployment to boost NATO.

Tokyo shares close lower ahead of earnings

Analysts said traders were also eying a two-day Fed meeting where policymakers are expected to set the stage for raising borrowing costs in March.

The dollar fetched 113.80 yen in Asian trade, against 113.98 yen in New York late Monday.

In Tokyo, Nissan added 0.91 percent to 605.4 yen while its smaller partner Mitsubishi Motors slid 0.32 percent to 310 yen after a report said the firms along with Renault will on Thursday announce plans to triple joint EV investments.

Toyota lost 1.84 percent to 2,236.5 yen after the automaker extended and revised its virus-linked temporary suspension of domestic plants.

Sony Group fell 2.76 percent to 12,480 yen after Sony Music Entertainment said Bob Dylan sold his entire back catalogue of recorded music along with "the rights to multiple future new releases" to the company.

Sony did not disclose the financial terms of the deal.