TOKYO, June 18 (Xinhua) -- Tokyo stocks closed lower Tuesday in choppy trade as investors were reluctant to make bold moves ahead of the U.S. Federal Reserve's two-day policy meeting scheduled to start later in the day, while a firm yen hit exporters.

The 225-issue Nikkei Stock Average dropped 151.29 points, or 0.72 percent, from Monday to close the day at 20,972.71.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, lost 11.07 points, or 0.72 percent, to finish at 1,528.67.

Shares got a boost in early trading from Wall Street's overnight lead, but turned negative as investors hit the sidelines to await cues from the Fed's policy setting meeting about possible interest rate cuts, brokers here said.

They said that speculation was growing the Fed might lower its interest rates to deal with economic headwinds facing the world's largest economy.

"Expectations have grown about a rate cut in July, but if the Fed doesn't give any hint about that, the market could be disappointed and the Nikkei could drop to the 20,500 level," Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management Co., was quoted as saying.

Adding to downward pressure, the yen's rise against the U.S. dollar weighed on exporter issues typically reliant on a weaker yen to boost profits when repatriated and raise competitiveness in overseas markets, investment analysts here noted.

By the close of play, electric power and gas, mining and nonferrous metal-linked issues comprised those that declined the most, and issues that fell outpaced those that rose by 1,781 to 307 on the First Section, while 55 ended the day unchanged.

On the main section on Tuesday, 1,023.84 million shares changed hands, rising from Monday's volume of 934.71 million shares.

The turnover on the second trading day of the week came to 1,775.2 billion yen (16.39 billion U.S. dollars). Enditem

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