Japanese stocks fell marginally on Tuesday as oil prices extended gains amid growing concerns over energy supplies, fuelling expectations of further Federal Reserve interest rate hikes and pushing Treasury yields higher.

The benchmark Nikkei 225 closed down 396.35 points, or 0.60%, at 65,481.27.

Oil prices gained on continued supply disruptions and reports of clashes between the Saudi-backed coalition and the Iran-backed Houthi forces, while US-Iran talks on reopening the Strait of Hormuz remained uncertain.

On Corporate side, Toyota Motor (TYO:7203) posted its seventh consecutive drop in worldwide monthly sales in August, with group-wide volume falling 7.5% year over year to 832,618 vehicles, according to company data released Tuesday.

Also, Nissan Motor's (TYO:7201) global sales fell about 17.5% year over year to 207,162 units in August, according to a company release on Tuesday.