Headline indices of the Japan share market were lower on Tuesday, 18 December 2018, as losses on Wall Street overnight and wider global uncertainty stifles investor sentiment. Investors remained cautious ahead of the U.S. Federal Reserve's upcoming interest rate meeting decision due on Wednesday and Bank of Japan's monetary policy decision due on Thursday. All 33 issues of the Topix index declined, with shares in Pharmaceutical, Mining, Services, Fishery, Agriculture & Forestry, Electric Power & Gas, and Information & Communication issues being notable losers. In late afternoon trade, the 225-issue Nikkei index tumbled 358.09 points, or 1.66%, at 21,148.79. The broader Topix index of all First Section issues on the Tokyo Stock Exchange shed 27.54 points, or 1.73%, to 1,566.66.

US stocks hit nine-month lows overnight as a number of geopolitical concerns weighed on sentiment. The Dow plummeted 507.53 points or 2.1% to 23,592.98, the Nasdaq tumbled 156.93 points or 2.3% to 6,753.73 and the S&P 500 plunged 54.01 points or 2.1% to 2,545.94.

Investors are also cautious ahead of the Federal Reserve's interest rate decision Thursday morning. The rate decision will be followed by a press conference with chairman Jerome Powell. The market is pricing in a 70% chance of a US rate hike however economists will pay most attention to the tone of Fed Chair Jerome Powell's statement. Many investors now expect signs of economic turbulence would prompt the Fed to signal a slowdown in the pace of tightening next year.

Fears of a potential partial US government shutdown next week should President Trump not receive the necessary funding to build a wall with Mexico is also a concern.

The Bank of Japan's monetary policy decision is due on Thursday, followed by a briefing from governor Haruhiko Kuroda.

Shares of exporters were lower on a stronger yen. Tokyo Electron, Advantest, Panasonic, Sony, Mitsubishi Electric and Canon were lower in the range of 0.5% to 3%.

Among individual stocks, Hitachi lost almost 2% after the company announced it has reached a deal to acquire the power grid business of Swiss engineering group ABB, initially investing $6.4 billion for an 80.1% stake before a complete takeover.

CURRENCY NEWS: The Japanese yen, which can be a haven during market uncertainty, changed hands in the upper 112 yen zone against dollar on Tuesday, largely in line with its levels in New York overnight. The dollar was quoted at 112.83-84 yen compared with 112.79-89 yen in New York and 113.40-41 yen on Monday in Tokyo. The euro, meanwhile, fetched 128.06-10 yen against 127.99-128.09 yen in New York and 128.35-39 yen in late Monday afternoon trade in Tokyo.