Nikkei suffers biggest decline in more than 1 month on Fed hike worries

Anxiety is also growing ahead of next week's Bank of Japan policy review, which coincides with the Fed's

Japanese stocks posted their biggest decline in more than a month on Monday after comments by US Federal Reserve officials sparked fears of a rate hike as soon as next week, weighing on shares and other risk assets globally.

The Nikkei share average fell 1.7 per cent to 16,672.92 points, its lowest closing level since August 26. It was the largest daily percentage drop since early August.

Anxiety is also growing ahead of next week's Bank of Japan (BoJ) policy review, which coincides with the Fed's.

Sources familiar with BOJ thinking told Reuters last week that the central bank is studying several options to steepen the bond yield curve as authorities desperately seek tools to revive an economy that has failed to emerge from stagnation despite years of massive stimulus.

The broader Topix dropped 1.5 per cent to 1,323.10 and the JPX-Nikkei Index 400 declined 1.5 per cent to 11,870.36.