Tokyo stocks closed lower Tuesday, weighed down by Wall Street falls and fears over tensions in the Middle East.

The benchmark Nikkei 225 index dropped 1.94 percent, or 761.60 points, to 38,471.20, while the broader Topix index fell 2.04 percent, or 56.09 points, to 2,697.11.

Global investors remain wary about what Israel may do next following a barrage of Iranian drone and missile attacks.

Rising US bond yields drove down US tech shares, a trend that also weighed on Tokyo tech stocks.

"Speculations that the Bank of Japan may be forced to hike interest rates on the backdrop of the yen's depreciation and high oil prices also drove yields higher in Japan, which accelerated sales of risk assets" such as stocks, Iwai Cosmo Securities said.

In the forex market, the yen was drifting at its lowest point in more than three decades against the dollar.

The dollar was at 154.35 yen, compared with 154.24 yen on Monday in New York.

Japan's finance minister and other top officials have repeated that they are prepared to take "necessary steps", suggesting that they could step in to support the currency.

But such statements have done little to reverse the trend.

Among major shares, Toyota dropped 3.13 percent to 3,649 yen, Nissan slipped 1.30 percent to 578.9 yen, and Uniqlo operator Fast Retailing lost 1.80 percent to 40,870 yen.

Chip-making equipment manufacturer Tokyo Electron fell 4.15 percent to 37,660 yen.

Tech investor SoftBank Group sank 2.57 percent to 8,108 yen.