TOKYO - Japanese stocks opened 0.70 per cent lower Tuesday following a weak performance on Wall Street and in Europe amid lingering political uncertainty in Greece.

The Nikkei index at the Tokyo Stock Exchange lost 62.99 points to 8,910.85 at the opening bell.

Uncertainty over the outlook for the European financial crisis grew after Spanish bond yields rose overnight and Moody's downgraded the credit rating on 26 Italian banks, Tachibana Securities operating officer Kenichi Hirano said.

"We're at a crucial point after erasing all the gains that followed the Bank of Japan's surprising easing (announcement) on February 14," he told Dow Jones Newswires.

US stocks closed firmly in the red Monday as Greece's political stalemate and Spain's banking problems drove new fears about the strength of the eurozone.

Turmoil at JPMorgan Chase over its US$2 billion (S$2.5 billion) derivatives loss announced last week kept US bank shares under pressure.

The Dow Jones Industrial Average slid 125.25 points, or 0.98 per cent, to finish at 12,695.35.

The main cloud over trade was the continued stalemate in Greece over forming a new government, elevating worries over whether it will keep up with its massive bail-out programme or withdraw from the euro.

New elections appeared nearly inevitable.