(Updates with closing prices)

By Kevin Buckland

TOKYO, Sept 17 (Reuters) - Japan's Nikkei share average

fell on Tuesday, weighed down by worries of a stronger yen, as

investors braced for a super-sized interest rate cut from the

U.S. Federal Reserve this week.

The Nikkei closed 1% lower at 36,203.22, after

earlier dipping more than 2%. The broader Topix index

lost 0.6%.

Japanese markets were closed on Monday for a national

holiday, when the yen spiked to a more than one-year high

against the dollar.

Technology giants were the biggest drags on the Nikkei on

Tuesday, amid broader losses in export-dependent companies.

Banks also underperformed as sliding bond yields at home and

abroad slashed the outlook for income from investment and

lending.

Market odds of a 50 basis-point (bp) Fed rate cut on

Wednesday have soared to 67%, versus 33% probability for a

quarter-point reduction.

In total, 120 bps of cuts are priced for the remaining three

Fed meetings this year, which means traders expect a second

outsized reduction either in November or December.

The Bank of Japan will announce its policy decision on

Friday. While no rate increase is expected this time, officials

have struck hawkish postures in recent communications, fuelling

bets for a faster pace of policy normalisation.

"People are concerned about the potential for the yen to

continue to rise," with "both the Fed and BOJ playing their

parts in that," said Masayuki Kichikawa, chief macro strategist

at Sumitomo Mitsui DS Asset Management.

"People, including myself, are starting to get the

impression the BOJ is in a rush to raise interest rates,

irrespective of developments in the economy."

Chip-making equipment giant Tokyo Electron ( TOELF ) dived

5.24%, becoming the biggest drag on the index. Chip-testing

machinery maker Advantest ( ADTTF ) sagged 5.63% and artificial

intelligence-focused startup investor SoftBank Group

slid 3.1%.

Automakers lost ground, with Toyota Motor ( TM ) dropping

2% and Nissan ( NSANF ) off 2.07%.

Among lenders, Resona Holdings led declines on the Nikkei,

dropping 6.38%. Nomura Holdings ( NMR ) retreated 2.61%.

(Reporting by Kevin Buckland; Editing by Rashmi Aich and

Subhranshu Sahu)