Tokyo stocks lost ground Tuesday morning as the yen's appreciation against the U.S. dollar soured the market mood and saw the Nikkei index fall below the psychologically important 20,000 yen line.

The 225-issue Nikkei Stock Average dropped 127.00 points, or 0.63 percent, from Friday to 19,991.86.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, lost down 9.14 points, or 0.56 percent, to 1,616.34.

Bank, transportation equipment and real estate-linked issues comprised those that declined the most by the morning break.

Markets here were closed on Monday for a national holiday.