* Nikkei trades below 200-day moving average
* All subsectors in negative territory
* Exporters, securities stocks fall
By Ayai Tomisawa
TOKYO, Sept 12 (Reuters) - 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 globally.
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 Securities.
"People are worried as the Fed is not communicating with the market well."
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 2.2 percent.
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 bond buying.
The broader Topix dropped 1.7 percent to 1,320.59 and the JPX-Nikkei Index 400 declined 1.8 percent to 11,841.02. (Editing by Kim Coghill)