Japanese stocks closed lower due to stronger yen. The Japanese yen rose against the U.S. dollar as yesterday's weaker-than-expected ISM manufacturing purchasing managers' index weighed on the greenback. The ISM manufacturing purchasing managers' index in the U.S. decreased to 56.6 in September from 59.0 in August, missing expectations for a decline to 58.6.

Japan's monetary base increased 35.3% in September, missing expectations for a 38.9% rise, after a 40.5% gain in August.

Markets in Hong Kong are closed until Friday, while markets in Shanghai are closed until October 7 for a public holiday.

Indexes on the close:

Nikkei 225 15,661.99 -420.26 -2.61%

Hang Seng closed

Shanghai Composite closed