TOKYO, Feb 20 (Reuters) - Japanese shares fell more than

1% on Thursday, as automakers declined due to a stronger yen,

while investors assessed the potential impact of U.S. President

Donald Trump's latest tariff threat.

The Nikkei fell 1.36% to 38,630.81 by 0203 GMT,

while the broader Topix was down 1.27% to 2,732.18.

"The yen's strength against the dollar and uncertainties

about the U.S. tariff policy pushed Japanese equities lower,"

said Naoki Fujiwara, senior fund manager at Shinkin Asset

Management.

The yen rose to a more than two-month high of

150.52 per dollar, helped by a flight to safety over worries

about the impact of Trump's tariffs and bets of more Bank of

Japan (BOJ) rate hikes this year.

A stronger Japanese currency tends to hurt exporters, as it

decreases the value of overseas profits in yen terms when firms

repatriate them to Japan.

Automakers lost ground, with Toyota Motor ( TM ) falling

2.3% to drag the Topix the most. Honda Motor ( HMC ) and Nissan

Motor ( NSANF ) slipped 2.45% and 4.22%, respectively.

Uncertainties about Trump's tariff plans also weighed on

automakers. Trump said on Wednesday he would announce tariffs

related to lumber, cars, semiconductors and pharmaceuticals

"over the next month or sooner."

Japanese banks also fell, snapping a rally driven by

expectations for a BOJ policy shift. Mitsubishi UFJ Financial

Group ( MUFG ) slipped 2.4% and Mizuho Financial Group ( MFG )

lost 2.4%.

Meanwhile, worries about higher interest rates also weighed

on sentiment. On Wednesday, BOJ board member Hajime Takata

called more rate hikes to avoid the inflation risk.

"What he said was quite true but the market reacted

sensitively to his comments because there were no other major

market-moving cues after the corporate earnings season ended,"

said Shinkin Asset Management's Fujiwara.

Among individual stocks, Shiseido ( SSDOF ) extended gains

fuelled by news that investment group Independent Franchise

Partners is a shareholder of the cosmetics maker.

(Reporting by Junko Fujita; Editing by Subhranshu Sahu)