The Nikkei average dropped 1.03 percent to 36,203.22 while the broader Topix index settled 0.60 percent lower at 2,555.76.
Sony Corp, Toyota and Nissan all fell around 2 percent after the dollar briefly weakened to the lower 140-yen range.
Tech investor Softbank Group tumbled 3.1 percent, chip-related Advantest plummeted 5.6 percent and Tokyo Electron gave up 5.2 percent. Asian stocks turned in a mixed performance on Tuesday as investors braced for the Federal Reserve's most anticipated meeting in years.
A two-day policy meeting of the U.S. Federal Reserve gets underway later today, with markets seeing a nearly 70 percent probability of a bigger 50 bps rate cut to the 4.7-5 percent range on Wednesday. Markets in mainland China and South Korea were closed for public holidays.
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