TOKYO - Tokyo shares edged lower by the break on Tuesday, dipping 0.37 per cent following losses on Wall Street amid political and economic uncertainty in Europe, and softer Chinese manufacturing figures.

The Nikkei 225 index at the Tokyo Stock Exchange lost 35.35 points to 9,506.82 by the break. The broader Topix index of all first-section issues slipped 0.39 per cent, or 3.14 points, to 806.40 yen (S$12.50).

US and European markets were lower as Chinese manufacturing activity contracted for the sixth straight month, and in the 17-nation eurozone, private-sector activity shrank the most in five months.

The Dutch government collapsed Monday after a breakdown on budget talks, a day after French President Nicolas Sarkozy lost a first-round presidential vote to Socialist Francois Hollande, both weighing on markets.

But weakness in the Japanese market would likely be limited ahead of US and Japanese central bank policy meetings and next week's public holiday in Japan, said Tatsunori Kawai, chief strategist at kabu.com Securities.

"While many investors are clearly sidelined ahead of both US Fed and BoJ policy announcements (this week), the upcoming Golden Week holiday next week is also going to hold participation levels down for the time being," he said.

Investors were also looking to Japan corporate earnings reports, but markets had largely priced in concerns of soft profits, said Mattia Ciancaleoni, director of equity sales at Citigroup Global Markets Japan.

"Even if companies' earnings guidance come in weaker than expected, markets could remain firm considering many players have hedged their positions with downside protection," she told Dow Jones Newswires.

Fast Retailing, operator of cheap chic clothing giant Uniqlo, was down 0.94 per cent at 17,890 yen, while factory automation maker Fanuc was off 0.68 per cent at 14,430 yen.

Some shares gained on earnings-related news, with technology giant Advantest rising 5.90 per cent to 1,184 yen after the Nikkei business daily reported that it would return to an operating profit in the January-March quarter.

All Nippon Airways was up 3.60 per cent at 230 yen after it said Monday that it was boosting its net profit forecast to 28 billion yen in the fiscal year to March, up 40.0 per cent from the 20.0 million yen it predicted earlier.