(Corrects headline to say Nikkei tumbles to 7-1/2-week low, not 6-week low)
* All sectors in negative territory
* Market focuses on if assets will rebound after Fed's expected hike - analysts
* Market looks past central bank's 'tankan' survey
By Ayai Tomisawa
TOKYO, Dec 14 (Reuters) - Japan's Nikkei share average tumbled more than 3 percent to a 7-1/2-week low on Monday as global oil prices extended their plunge, adding to nervousness ahead of an expected U.S. interest rate hike this week.
The Nikkei dropped 3.2 percent to 18,611.09 points by midmorning, the lowest since Oct. 22, as investors sold riskier assets.
Last week, the benchmark fell 1.4 percent, as investors worried whether a weakness in oil and commodities signalled a broader global economic slowdown, though much of the glut has been attributed to excess supply.
Investors' focus now on is whether the market can withstand a U.S. rate hike, which is excepted to be announced after the U.S. Federal Reserve's Dec. 15-16 policy review.
"If the Fed hikes a rate as expected, people are watching whether recently sold assets such as U.S. shares, oil and the dollar will rebound," said Yutaka Miura, a senior technical analyst at Mizuho Securities. "If they rebound, the market will likely be stabilized, but if not, we have to prepare for another sell-off."
Mining shares underperformed, with Inpex Corp stumbling 4.7 percent and Japan Petroleum Exploration shedding 3.5 percent.
Trading houses, whose earnings depend on commodity prices, also lost ground. Mitsubishi Corp slid 2.9 percent and Mitsui & Co declined 2.4 percent.
As investors became risk-averse, financials were sold as well. Nomura Holdings dropped 4.1 percent and Daiwa Securities Group fell 2.8 percent.
Exporters were also lower on the stronger yen, with Toyota Motor Corp falling 3.2 percent and Honda Motor Co shedding 3.1 percent.
Investors quickly looked past a closely watched central bank survey, which showed that Japanese business sentiment held steady in the three months to December.
The broader Topix dropped 2.4 percent to 1,512.11, with all of its 33 subsectors in negative territory. The JPX-Nikkei Index 400 fell 2.5 percent to 13,599.59. (Editing by Kim Coghill)