The Nikkei 225 Index dropped 0.01% to settle at 63,484 on Tuesday, while the larger Topix Index dropped 0.52% to 4,037 as Japanese stocks found it difficult to hold onto earlier gains in the face of rising global bond yields and oil prices. Oil prices remained close to four-month peaks, as benchmark yields in the US and Japan rose to multi-year levels. Investors prepared for significant central bank policy decisions this week, as both the US Federal Reserve and the Bank of Japan are anticipated to increase interest rates.

Meanwhile, technology stocks exhibited a varied performance in light of increasing apprehensions regarding a decelerated trajectory of AI advancement. Significant reductions were observed in the shares of Advantest, which fell by 3%, Fujikura, declining by 1.9%, and Furukawa Electric, which experienced a decrease of 3.3%.

In corporate developments, Kioxia Holdings experienced a 2.3% increase in value following reports indicating that the Japanese memory chipmaker is contemplating raising a minimum of $10 billion through the issuance of American depositary receipts.