Tokyo stocks closed lower on Friday as the yen's appreciation against the U.S. dollar dampened investor sentiment while ongoing concerns about tensions on the Korean Peninsular continued to weigh on the market mood.

The 225-issue Nikkei Stock Average lost 121.70 points, or 0.63 percent, from Thursday to end the day at 19,274.82.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, dropped 4.70 points, or 0.29 percent, to finish at 1,593.54.

Insurance, iron and steel, and real estate-linked issues comprised those that declined the most by the close of play, and falling issues outpaced rising ones by 1,247 to 678, with 101 ending the day unchanged.

Local brokers here said that shares were initially sold on concerns that Hurricane Irma could negatively impact the U.S. economy and the market mood early on mirrored that of Wall Street which closed lower overnight.

The yen's appreciation against the U.S. dollar further dampened investor sentiment and hurt export-linked issues, traders here said, with downwardly revised gross domestic product data for Japan doing little to foster incentives.

Japan's economy grew an annualized 2.5 percent in the April-June period, the government said Friday in a downward revision from the annualized 4.0 percent growth in real terms, or 1.0 percent from the previous quarter in real terms, according to preliminary GDP data released on Aug. 14.

Investors have also been in a circumspect mood due to tensions on the Korean Peninsular, and concerns of another intercontinental ballistic missile launch to mark the national foundation day of the Democratic People's Republic of Korea (DPRK) on Saturday saw some investors benching themselves until after the weekend, strategists said.

"Most investors will be on the sidelines until Sept. 9, said Soichiro Monji, chief strategist at Daiwa SB Investments."

Other strategists like Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co., concurred saying that stocks could face further selling pressure next week, depending on whether or not there would be any geopolitical incidents on Saturday.

Exporters lost ground as a firm yen diminishes their profit margins and competitiveness in overseas markets, and Mazda Motor retreated 1.0 percent to 1,543 yen, and Panasonic lost 0.9 percent to close at 1,468.50 yen.

With average vacancy rates for offices in central Tokyo increasing by the end of August compared to a month earlier, related issues declined, with Sumitomo Realty & Development losing 0.9 percent to 3,197 yen, while Mitsui Fudosan dropped 1.2 percent to 2,285.50 yen.

Among other notable issues that closed in negative territory, Asahi Group Holdings fell 2.1 percent to 4,610 yen and Sapporo Holdings fell 2.1 percent to end at 3,095 yen.

Shares of brewers have been pressured by expectations for worse-than-expected sales following an unseasonably cool summer.

On the main section on Friday, 1,860.42 million shares changed hands, rising from Thursday's volume of 1,526.48 million shares and the turnover on the final trading day of the week totaled 2,714.5 billion yen (25.21 billion U.S. dollars).