Japan stocks dropped Tuesday as investors began to raise fears about global economy and situation of Beijing Olympic. Also some investors sold stocks for profit-taking before earnings season. Many investors expect results of Japan and U.S. companies' quarterly earnings will not be so profitable.

The 225-issue Nikkei Stock Average decreased 199.80 points, or 1.49 percent, to 13,250.43. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 22.94 points, or 1.76 percent, to 1,282.69. Among all the TSE first section issue, 339 increased and 1,288 decreased. The trading volume reached 1,687.76 million stocks or 1,957.7 billion yen. The Japanese currency is being traded in the level of 102 yen per a U.S. dollar.

Mainly financial issues such as Mizuho Financial Group and Mitsui Sumitomo Financial Group were declined. Also export-oriented issues such as Sony and Canon declined because of slightly weakening dollar.

Brokers said investors felt that the price was overheating after Nikkei reached 13,500 line the previous day, according to Nikkei. The Nikkei had been increased more than 7 percent since April.