Tokyo stocks ended lower Thursday, tracking losses on Wall Street after the US Federal Reserve unveiled another interest rate hike despite worries about the banking sector.
The benchmark Nikkei 225 index fell 0.17 percent, or 47.00 points, to 27,419.61, while the broader Topix index shed 0.29 percent, or 5.61 points, to 1,957.32.
Worries about the global banking sector weighed on the market particularly after US Treasury Secretary Janet Yellen said Washington was not looking to offer a "blanket" increase in bank deposit insurance.
"The sentiment worsened on Treasury Secretary Yellen's comment that they were not considering broad deposit protection," Daiwa Securities said.
Yellen's comment "illuminated a sense of uncertainty over how authorities will deal with worries about the financial system", it said.
Global investors have been shaken by the sudden collapses and woes of Silicon Valley Bank and other high-profile financial institutions in recent weeks.
The Federal Reserve continued hiking interest rates Wednesday to fight inflation and noted that banking sector turmoil could weigh on the economy.
Still, investors in Tokyo remained willing to take some risks as the US bond yields fell to encourage buying.
Semiconductor shares enjoyed gains after shares of global giant Nvidia advanced.
"Dip buying lifted semiconductors and economically sensitive stocks," IwaiCosmo Securities said.
The dollar stood at 130.71 yen in Tokyo, from 131.38 yen in New York.
Among major shares, Advantest, which makes tests for semiconductors, rose 1.94 percent to 12,110 yen, while Tokyo Electron, which builds tools to make chips, added 1.51 percent to 49,100 yen.
Banking shares fell. Mitsubishi UFJ Financial Group dropped 1.36 percent to 839.2 yen and Mizuho Financial Group fell 0.51 percent to 1,857.5 yen.
E-commerce giant Rakuten fell 2.45 percent to 638 yen.