TOKYO, Sept 12 (Reuters) - Japanese stocks posted their biggest decline in more than a month on Monday after comments by U.S. 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 percent to 16,672.92 points, its lowest closing level since Aug. 26. It was the largest daily percentage drop since early August.
Anxiety is also growing ahead of next week's Bank of Japan 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 percent to 1,323.10 and the JPX-Nikkei Index 400 declined 1.5 percent to 11,870.36. (Reporting by Ayai Tomisawa; Editing by Richard Borsuk)