Tokyo stocks ended lower Wednesday after falls on Wall Street while investors awaited the Federal Reserve's decision and future guidance on US interest rates.

The benchmark Nikkei 225 index lost 0.34 percent, or 131.61 points, to 38,274.05, while the broader Topix index fell 0.50 percent, or 13.77 points to 2,729.40.

Investors began the day selling after a jump in US employee compensation costs reduced the market's hopes for early rate cuts and drove down US stocks overnight.

"Amid the toxic brew of data, bullish sentiment took a severe hit as a hotter-than-expected US employment cost index, the Federal Reserve's preferred gauge of wage inflation, potentially dashed hopes for any rate cuts in 2024," Stephen Innes of SPI Asset Management said.

Before the Federal Open Market Committee makes its policy decision, Tokyo players were not able to make major moves, Daiwa Securities said.

"Before the FOMC, many investors were sitting on their hands and taking a wait-and-see attitude," the brokerage said.

The forex market was also making investors cautious, as many analysts believe that the Japanese government on Monday bought the yen to slow the speed of its depreciation.

The dollar stood at 157.86 yen Wednesday, against 157.80 yen seen in New York on Tuesday.

Among major shares, Toyota dropped 0.91 percent to 3,605 yen. SoftBank Group lost 1.59 percent to 7,789 yen.

Fast Retailing lost 0.87 percent to 41,190 yen. Nintendo fell 1.08 percent to 7,637 yen.

Sony Group reversed earlier losses and ended up 0.11 percent or 13,100 yen.