TOKYO, Sept. 21 (Xinhua) -- Tokyo stocks closed lower Wednesday extending drops on Wall Street, as investors also awaited a further rate hike expected to be announced after the U.S. Federal Reserve policy meeting.

The 225-issue Nikkei Stock Average lost 375.29 points, or 1.36 percent, from Tuesday to close the day at 27,313.13, hitting a two-month low.

The broader Topix index, meanwhile, went down 26.47 points, or 1.36 percent, to finish at 1,920.8.

The U.S. dollar briefly topped the 144 yen line after the Bank of Japan (BOJ), the country's central bank, announced Wednesday it planned to conduct an emergency bond-buying operation.

Dealers here said the move led to yen selling by reinforcing the view that the BOJ will not tweak its monetary-easing policy in its meeting through Thursday, despite the wider interest rate gap between the United States and Japan weighing on the yen.

The BOJ's announcement came before the conclusion of the Fed's two-day policy meeting, and some investors expected the U.S. central bank to implement a one-percentage-point interest rate hike to bring down soaring inflation in the country.

Japanese stocks on Wednesday were also dragged down by weaker auto issues, tracking an overnight plunge in shares of the U.S. automaker Ford Motor. Toyota Motor lost 2.4 percent and Honda Motor was down 1.9 percent.

Ford said Monday its third-quarter earnings will be affected by parts shortage and increasing procurement expenses due to inflation, which "sparked concerns that global automakers like Toyota and Honda may also face similar challenges," Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., was quoted as saying.

By the close of play, shares in transportation equipment, air transportation, as well as electric power and gas led the declines, with declining issues outpacing advancing ones by 1,491 to 288 on the Prime Market.

On the Prime Market on Wednesday, 1,068.75 million shares changed hands, expanding from Tuesday's 1,034.41 million shares.