TOKYO, March 16 (Reuters) - Japanese stocks fell on Wednesday as investors reduced their holdings ahead of the outcome of the U.S. Federal Reserve's policy meeting, while Sharp Corp tumbled after news that its takeover deal with Foxconn may not be signed this week.
Bank stocks languished after Bank of Japan Governor Haruhiko Kuroda said it was theoretically possible for the central bank to cut interest rates to around minus 0.5 percent, driving the banking sector to the biggest drop on the board.
The Nikkei share average fell 0.8 percent to 16,974.45.
The broader Topix slipped 0.8 percent to 1,360.50 and the JPX-Nikkei Index 400 declined 0.9 percent to 12,291.97.
Sharp plunged 12 percent and was the biggest loser on the board after two people familiar with the matter told Reuters that Foxconn was seeking guidance from the loss-making electronics maker on its latest quarterly performance and a signing of the deal may not happen this week. (Reporting by Ayai Tomisawa; Editing by Eric Meijer)