Tokyo stocks open lower after Wall Street retreat.

Tokyo stocks opened lower on Wednesday following a retreat on Wall Street and weak US economic data.

The benchmark Nikkei 225 index dropped 0.51 percent, or 114.40 points, to 22,507.98 in early trade, while the broader Topix index was down 0.40 percent, or 7.19 points, at 1,783.78.

“A wait-and-see mood is likely to grow after US stocks took a breather,” Yoshihiro Ito, chief strategist at Okasan Online Securities, said in a note.

US stocks finished lower on Tuesday as investors continued to mull how an overhaul of the US tax code could affect corporate earnings.

A survey released Tuesday also showed growth in the key US services sector slowed in November from the blistering pace of recent months, falling back closer to the average for the past year.

Investors are expected to grow even more cautious towards the end of the week as the closely watched US jobs survey is due out on Friday, Ito said.

Market players scrutinise the monthly data in a bid to get clues over US monetary policy.

The dollar was trading at 112.47 yen on Wednesday against 112.57 yen in New York Tuesday afternoon.

In Tokyo stocks trade, banks fell with Mitsubishi UFJ off 1.09 percent to 793.8 yen and Mizuho down 0.39 percent at 203 yen.

Toshiba rose 2.85 percent to 288 yen on hopes that the embattled conglomerate is nearing a deal with Western Digital to settle a legal dispute over the planned sale of its prized microchip business.