Asia markets fell on Tuesday, with Japanese shares dropping sharply, tracking declines on Wall Street overnight on jitters over a new immigration measure taken by the Trump administration.
The yen strengthened against the dollar after the Bank of Japan (BOJ) kept its monetary policy steady as expected on Tuesday. The Japanese currency rose against the greenback from levels near 113.68 before the BOJ's decision to around 113.48 at 2:51 p.m. HK/SIN, and stronger than levels near 115.20 touched in the previous week.
The dropped 327.51 points, or 1.69 percent, to 19,041.34, while the Topix fell 22.10 points, or 1.43 percent, to 1,521.67.
The BOJ kept its policy stance unchanged, but raised its gross domestic product (GDP) forecast to 1.4 percent for the current fiscal year ending March 31, from a previous prediction of 1.0 percent growth made in October. The BOJ said in its policy statement it expected inflation to rise to around its target of 2 percent by fiscal 2018.
The yen's strength on Tuesday sent stocks lower across the board, with export stocks selling off.
Nintendo shares finished down 1.89 percent as investors looked ahead to the Japanese gaming giant's nine-month earnings results due after the Tokyo market close.
Elsewhere, government data released Tuesday morning showed Japanese household spending fell 0.3 percent in December from a year earlier, less than the median estimate of a 0.6 percent decline, according to Reuters. Meanwhile, seasonally adjusted jobless rate was flat at 3.1 percent in December, in line with a Reuters estimate, while industrial output rose 0.5 percent in December from a month earlier.
In company news, shares of NEC dropped 17.41 percent after the Japanese communications equipment maker slashed its profit outlook for the year ending March 31 to 30 billion yen ($264 million) from an earlier prediction of 100 billion yen, reported Reuters.
The session in Asia followed a negative closing stateside, as a new measure taken by the Trump administration on immigration sent jitters through the market.
President Donald Trump signed an executive order late Friday that would temporarily bar entry into the U.S. to Iraqi, Syrian, Iranian, Sudanese, Libyan, Somali and Yemeni citizens. The order seeks "extreme vetting" procedures for those it did allow to enter the U.S.In signing the order, Trump said he pledged to "keep radical Islamic terrorists out of the United States of America."
The fell 122.65 points, or 0.61 percent, to close at 19,971.13. The S&P 500 dropped 13.79 points, or 0.6 percent, to end at 2,280.90. The composite slid 47.07 points, or 0.83 percent, to close at 5,613.71.
"Markets are struggling with the "Jekyll and Hyde" nature of U.S. President Donald Trump," said analysts at Singapore's DBS Bank in a note. "Put simply, markets cheered Trump's expansionist plans in November-December only to come face to face with his protectionist fangs in January."
On Tuesday during Asian hours, U.S. futures traded lower; the Dow mini futures were off by 51 points, the Nasdaq e-mini futures were down 14 points and the S&P e-mini futures contract slipped 6 points.
In the broader currency market, the index, which measures the greenback against a basket of currencies, fell slightly to 100.37. The Australian dollar traded at $0.7561, while the euro fetched $1.0697.
Oil prices also declined on Monday on the back of news that pointed to weekly increase in U.S. drilling activity. The number of active U.S. oil rigs rose last week to the highest level since November 2015, Reuters reported citing Baker Hughes data.
On Tuesday, U.S. crude continued the downward trend, shedding 0.44 percent to $52.40 a barrel, after finishing down 54 cents a barrel during U.S. hours on Monday. Global benchmark Brent slipped 0.18 percent on Tuesday to $55.13.
Markets in China and Hong Kong were closed for the Lunar New Year public holidays.