Japan stocks fall on economy jitters, stronger yen

The benchmark Nikkei 225 stock average lost 272.13 points, or 3 percent, to 8,809.30. The broader Topix index fell 3 percent to 889.36.

The $586 billion Chinese stimulus package lifted Asian markets the previous day, but on Wall Street, the initial enthusiasm of investors quickly fizzled under heightening concerns about the health of U.S. companies.

On Monday, electronics retailer Circuit City filed for bankruptcy protection about a week after it said it would close 20 percent of its stores. The company has been struggling as nervous consumers spend less and credit has become tighter.

Shares of automaker General Motors, which announced a $2.5 billion third-quarter loss on Friday, plunged 23 percent, hitting levels unseen since after World War II.

Sentiment in Tokyo has recovered somewhat from late October, but investors remain cautious amid so much uncertainty about the world economy, said Hiroichi Nishi, general manager at Nikko Cordial Securities.

"Right now, Japanese stocks are at the mercy of global headwinds" such as foreign exchange levels and overseas equity markets, he said.

Major exporters in particular fell victim to the bearish mood and stronger yen. Toyota Motor Corp. shed 4.9 percent to 3,300 yen, Canon Inc. slid 8.4 percent to 3,150 yen, and Panasonic Corp. was off 5.7 percent to 1,487 yen.

The dollar was at 97.87 yen Tuesday afternoon, down from around 99 yen the previous day in Asia. A stronger yen reduces the value of overseas profits when repatriated to Japan.

Government data Tuesday showed that Japan's current account surplus in September plunged 48.8 percent from a year earlier as import growth far outpaced export growth in the face of a global slowdown.