TOKYO, Jan 25 ― Tokyo stocks closed lower today, with investors cautious over geopolitical risks linked to Ukraine and the Federal Reserve's planned interest rate hikes.

The benchmark Nikkei 225 index dropped 1.66 per cent, or 457.03 points, to end at 27,131.34, while the broader Topix index tumbled 1.72 per cent, or 33.25 points, to 1,896.62.

"Investors became risk-averse due to uncertainties over US monetary policy and the Ukraine situation,” Okasan Online Securities said in a commentary.

"As a result, a wide range of stocks, particularly growth stocks, were sold, extending the decline,” it added.

US President Joe Biden declared "total” unity among Western powers yesterday after crisis talks with European leaders on deterring Russia from an attack against Ukraine, as 8,500 US troops were put on standby for possible deployment to boost Nato.

Analysts said traders were also eying a two-day Fed meeting where policymakers are expected to set the stage for raising borrowing costs in March.

The dollar fetched ¥113.80 (RM4.18) in Asian trade, against ¥113.98 in New York late yesterday.

In Tokyo, Nissan added 0.91 per cent to ¥605.4 while its smaller partner Mitsubishi Motors slid 0.32 per cent to ¥310 after a report said the firms along with Renault will on Thursday announce plans to triple joint EV investments.

Toyota lost 1.84 per cent to ¥2,236.5 after the automaker extended and revised its virus-linked temporary suspension of domestic plants.

Sony Group fell 2.76 per cent to ¥12,480 after Sony Music Entertainment said Bob Dylan sold his entire back catalogue of recorded music along with "the rights to multiple future new releases” to the company.

Sony did not disclose the financial terms of the deal. ― AFP