* Nikkei trades below 200-day moving average
* All subsectors in negative territory
* Exporters, securities stocks fall
By Ayai Tomisawa
TOKYO, Sept 12 Japanese stocks fell nearly 2
percent to two-week lows on Monday after comments by U.S.
Federal Reserve officials sparked expectations of a rate hike as
soon as next week, weighing on shares and other riskier assets
The Nikkei fell 1.9 percent to 16,647.52 points by
late morning, its lowest since Aug. 29. It traded below its
200-day moving average for the first time in more than a week.
Investors were risk averse after Wall Street tumbled on
Friday, with the S&P 500 seeing its worst day since June
after Boston Fed President Eric Rosengren, a historically dovish
policymaker, said the Fed faced increasing risks if it waited
too much longer to raise interest rates.
"The market is worried that the Fed mentions an interest
rate hike even though the recent economic readings were weak,"
said Toru Ibayashi, head of CIO Wealth Management at UBS
"People are worried as the Fed is not communicating with the
All of the Topix's 33 subsectors were in negative territory,
with cyclical stocks battered in particular.
Toyota Motor Corp dropped 1.6 percent, Advantest
Corp shed 1.9 percent and Panasonic Corp fell
Securities stocks also took a hit. Nomura Holdings
shed 2.3 percent and Daiwa Securities Group tumbled 3.0
percent as investors have become risk averse.
Unexpectedly strong Japan's July core machinery orders,
which showed an increase of 4.9 percent in July from the
previous month, did little to help the stock market.
Anxiety is also growing ahead of next week's Bank of Japan
policy review, which coincides with the Fed's.
Sources familiar with its thinking told Reuters last week
that the BOJ is now 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 yield on the 30-year Japanese government bonds
jumped 4.0 basis points on Monday to hit its
highest level since late March on expectations that the Bank of
Japan may seek to steepen the yield curve and possibly taper its
The broader Topix dropped 1.7 percent to 1,320.59
and the JPX-Nikkei Index 400 declined 1.8 percent to
(Editing by Kim Coghill)