Japan's Nikkei stock average fell 0.4 percent to its lowest close in more than

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eight months on Tuesday, with the yen holding onto gains against the dollar as mounting signs of weak economic growth dampened appetite for risk.

But the Nikkei pared earlier losses after a government source told Reuters that Japanese Prime Minister Naoto Kan and Bank of Japan Governor Masaaki Shirakawa are likely to meet next Monday, sending dollar/yen slightly higher.

The source said the meeting may be pushed forward to later this week, depending on market developments.

The benchmark Nikkei lost 34.99 points to 9,161.68, its lowest finish since Nov. 27 last year. It earlier fell as far as 9,084.24, within sight of a 13-month low of 9,065.94 hit last week.