TOKYO, July 4 (Reuters) - Tokyo stocks ended lower on Tuesday in volatile trade after market sentiment soured on a report North Korea would make a major announcement later in the day, hours after the isolated nation fired a missile that landed in Japanese waters.
South Korea's Yonhap news agency reported that North Korea said it would make a major announcement at 3:30 p.m. (0630 GMT) on Tuesday.
Earlier in the day, North Korea test-launched an intermediate-range ballistic missile into the sea off its east coast, South Korean and U.S. officials said.
South Korean President Moon Jae-in said the military was analysing the missile with the possibility that it may have been an intercontinental ballistic missile-class rocket.
The Nikkei dropped 0.1 percent to 20,032.35, moving away from an intraday high of 20,197.16 reached in the morning.
The news report "stating that it (North Korea) will make an important announcement this afternoon after it launched a ballistic missile earlier in the day really unnerved the markets, even if it turns out to be sabre rattling," said Gavin Parry, managing director at Parry International Trading Limited.
Parry said "there is a major uncertainty for investors to digest," as stock markets in Asia turned lower on the escalating tensions.
On the same day, Japan's Defence Ministry said that the intermediate-range ballistic missile launched by North Korea "greatly exceeded" an altitude of 2,500 kilometres (1,560 miles).
"If it's an intercontinental basaltic missile, it will likely reach America's west coast, but Trump would not wait until it reaches his land, so the market started to worry what Trump's next move would be," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
U.S. President Donald Trump said in a Twitter message it was "hard to believe South Korea and Japan will put up with this much longer."
Still, with the dollar rising against the yen on upbeat U.S. data, automakers staged a rally. Toyota Motor Corp gained 1.9 percent and Honda Motor Co surged 2.0 percent.
The dollar reached a seven-week high of 113.480 yen on the previous day before falling 0.4 percent to 112.910 yen on the heightened risk aversion.
However, 24 of Topix's 33 subsectors were in negative territory.
The broader Topix shed 0.3 percent to 1,609.70. (Reporting by Ayai Tomisawa; Editing by Shri Navaratnam)