TOKYO (Kyodo) -- Tokyo stocks declined sharply Tuesday morning, dragged down by caution over upcoming domestic earnings and Japan's general election, with sentiment further dampened by an overnight fall of the U.S. Dow Jones index.

The 225-issue Nikkei Stock Average fell 555.13 points, or 1.43 percent, from Monday to 38,399.47. The broader Topix index was down 30.55 points, or 1.14 percent, at 2,649.36.

The U.S. dollar remained in the upper 150 yen range in Tokyo after hitting an around two-and-half month high of 150.88 yen in New York overnight, following a rise in long-term U.S. Treasury yields amid recent firm economic data.

At noon, the dollar fetched 150.81-86 yen compared with 150.77-87 yen in New York and 149.83-85 yen in Tokyo at 5 p.m. Monday.

The euro was quoted at $1.0815-0816 and 163.10-17 yen against $1.0809-0819 and 163.03-13 yen in New York, and $1.0848-0849 and 162.54-58 yen in Tokyo late Monday afternoon.

Stocks were mostly weak from the outset and extended losses in the morning, with the Nikkei briefly falling more than 700 points, as investors remained reluctant to buy before major manufacturers start releasing earnings this week, analysts said.

Amid caution over the earnings results and growing uncertainty about Japan's House of Representatives election on Sunday, "there is zero incentive to move money," said Chihiro Ota, assistant general manager of investment research at SMBC Nikko Securities Inc.

Some media polls show that Japan's ruling coalition of the Liberal Democratic Party and the Komeito party could lose their majority in the powerful lower house, following a slush funds scandal involving the LDP.