TOKYO: Japan’s Nikkei share average fell more than 1% on Tuesday, with chip-related stocks leading the decline, as caution set in ahead of central bank meetings in the United states and Japan.

The Nikkei index had declined 1.2% to 33,129.23 by the midday break and looked set to post its biggest daily drop since Aug. 25. Japanese markets were closed on Monday for a holiday.

“Investors were cautious ahead of big events - the central meetings in the US and Japan,” said Takamasa Ikeda, senior portfolio manager at GCI Asset Management.

Chip-making equipment maker Tokyo Electron fell 5.18% to become the biggest drag and the worst performer on the Nikkei. Chip-testing making equipment maker Advantest lost 4.54% and chip maker Renesas Electronics slipped 5.07%.

Technology start-up inventor SoftBank Group slipped 1.86% after the shares of its chip designer Arm Holdings fell on the second day of trading.

Money markets expect the US Federal Reserve to keep rates on hold on Wednesday, according to the CME FedWatch tool, though focus will be on the central bank’s forward guidance.

The Bank of Japan (BOJ) will announce its policy decision on Friday after the conclusion of a two-day policy meeting.

Investors are waiting for comments from BOJ Governor Kazuo Ueda, who told a newspaper earlier this month that the central bank could get enough data by year-end to judge whether conditions were in place to raise short-term interest rates.

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The broader Topix fell 0.56% to 2,414.69.

Its losses were however limited as heavyweights Toyota Motor rose 1.01% and Mitsubishi UFJ Financial Group climbed 1.43%.

The Banking sector rose 1.05% and automakers climbed 1.07%.

The shipping industry jumped 3.54% to become the top gainer among the Tokyo Stock Exchange’s 33 industry sub-indexes.