TOKYO: Tokyo stocks closed lower on Tuesday on renewed concerns about prolonged monetary tightening in the United States, while traders also kept an eye on the currency market for potential government intervention.

The benchmark Nikkei 225 index fell 1.64 percent, or 521.94 points, to 31,237.94, while the broader Topix index lost 1.68 percent, or 38.97 points, to 2,275.47.

“Renewed caution about a prolonged period of monetary tightening in the US has cooled investor sentiment” in the Tokyo market, Iwai Cosmo Securities said after a senior Federal Reserve official indicated the central bank was likely to maintain its high rate regime to bring inflation down.

On Wall Street, the Dow slipped and the S&P 500 ended flat on Monday despite a congressional deal to avert a government shutdown, as worries over higher-for-longer rates weighed on the market amid a rise in US Treasury yields.

In Tokyo, the dollar fetched 149.80 yen, against 149.84 yen in New York and 149.65 yen in Tokyo late Monday.

Analysts have said the yen’s weakening towards the 150 level against the dollar could prompt government intervention.

Among major shares, oil and gas developer Inpex tanked 6.49 percent to 2,80.5 yen while Uniqlo operator Fast Retailing fell 1.50 percent to 31,980 yen.

Automakers were lower with Toyota dropping 3.05 percent to 2,605 yen and Nissan plunging 4.96 percent to 630.1 yen.