Japanese stocks lost early momentum to close in the red on Tuesday despite having a strong start amid caution relating to the Middle East crisis.
Asian equities showed mixed movement on Tuesday, as media reports suggest that investors are still skeptical about the relief provided by the easing of oil prices and President Donald Trump's decision to call off fresh military strikes against Iran, which raised hopes for a peace deal and reopening of the Strait of Hormuz.
The Nikkei 225 closed down 265.36 points or 0.4% at 60,550.59.
The bourse had opened on a positive note, lifted by the optimism in the local market after Japan's economy grew faster than expected in the first quarter, supporting further rate hikes by the Bank of Japan.
According to a Cabinet Office report released Tuesday, real GDP grew at an annualized rate of 2.1% in the January-March period - before the full effects of the war in Iran began to materialize.
On the corporate side, shares of JX Advanced Metals (TYO:5016) closed down nearly 5% after the company finalized the terms of its two tranches of zero-coupon convertible bonds due in 2029 and 2031.
Also, Daiwa Securities (TYO:8601) shares closed up nearly 2% after a Nikkei Asia report said the company plans to allocate 100 billion yen into battery storage facilities by 2030.