Tokyo stocks closed lower Tuesday as investors' risk averse mood continued amid concerns of escalating tensions on the Korean Peninsular.

The 225-issue Nikkei Stock Average dropped 122.44 points, or 0.63 percent, from Monday to close the day at 19,385.81.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, lost 12.84 points, or 0.80 percent, to finish at 1,590.71.

Marine transportation, securities and air transportation-linked issues comprised those that declined the most by the close of play, with falling issues beating rising ones by 1,786 to 181 on the First Section.

Local brokers said the market mood remained "risk off" with investors opting not to make bold moves amid ongoing concerns about a possible escalation of tensions on the Korean Peninsula.

They said that investors were also steering away from riskier assets like stocks and realigning investments into safe havens including the yen, which drove the currency's rate up against a basket of other major currencies.

Traders said that export-linked issues came under pressure due to the strength of the yen as they tend to get sold when the yen is strong as their profitability and competitiveness in overseas markets becomes diminished.

Exporters retreating also tends to drag down the broader market and contribute to dampening investor sentiment.

Market players also noted that some investors were in wait-and-see mood ahead of the U.S. markets' reaction to the latest geopolitical situation on the Korean Peninsular.

Markets were closed on Monday in the United States for a national holiday.

On the main section on Tuesday, 1,640.26 million shares changed hands, rising from Monday's volume of 1,595.79 million shares.

The turnover on the second trading day of the week came to 1,953.9 billion yen (17.87 billion U.S. dollars).