TOKYO, Dec. 16 (Xinhua) -- Tokyo stocks closed lower Tuesday ahead of a U.S. Federal Reserve policy meeting.

    The benchmark 225-issue Nikkei Stock Average lost 96.64 points, or 1.12 percent, from Monday to 8,568.02.

    The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 18.31 points, or 2.16 percent, to 828.62.

    Stocks declined across the board, led by consumer finance, glass and ceramics, and iron and steel issues.

    On the Tokyo market, investors remained cautious ahead of the announcement by the Fed's policy-setting Federal Open Market Committee about its decision on whether to cut its benchmark short-term target interest rate.

    Brokers believed many investors are fearful of the subsequent appreciation of the yen against the U.S. dollar if Fed decided a rate cut.

    On the First Section, declining issues outnumbered advancing ones 1,195 to 439, with 79 others remaining unchanged.

    Toyota Motor and Isuzu Motors were among the day's major decliners, after Toyota Motor Corp. said Tuesday it has halted a joint project with Isuzu Motors Ltd. to develop a diesel engine for small vehicles. Toyota Motor dropped 20 yen, or 0.66 percent, to 3,010 yen, and Isuzu Motors shed 3 yen, or over 2 percent, to 116 yen.

    Financial issues suffered from worries about sluggish corporate earnings of U.S. financial institutions and investment banks, as Goldman Sachs is about to release its earnings. Mitsubishi UFJ Financial Group, the most heavily traded issue both in value and volume terms, slipped 9 yen, or nearly 2 percent, to 508 yen.

    Trading volume on the main section came to 1,936.28 million shares, up from Monday's 1,866.44 million.

    The TSE's Second Section index was down 7.50 points, or 0.39 percent, to 1,932.15 on a volume of 50.48 million shares. On the Osaka Securities Exchange, the near-term March Nikkei 225 index futures contract was down 70 points to 8,560.