This May 7, 2020 file photo shows the Tokyo Stock Exchange. (Mainichi)

       TOKYO (Kyodo) -- Tokyo stocks plunged Thursday morning, with the Nikkei index dropping 2 percent, after the minutes of the U.S. Federal Reserve's December policy meeting fueled worries that monetary policy could be tightened sooner than expected.

       The 225-issue Nikkei Stock Average fell 610.67 points, or 2.08 percent, from Wednesday to 28,721.49. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 28.34 points, or 1.39 percent, at 2,010.93.

       Decliners were led by precision instrument, electronic appliance and services issues.

       The U.S. dollar fell to the upper 115 yen range from the lower 116 yen level in Tokyo as investors bought the Japanese currency, perceived as a safe-haven asset, following a sharp drop in Tokyo stocks, dealers said.

       At noon, the dollar fetched 115.93-96 yen compared with 116.05-15 yen in New York and 116.03-04 yen in Tokyo at 5 p.m. Wednesday.

       The euro was quoted at $1.1317-1321 and 131.20-28 yen against $1.1306-1316 and 131.31-41 yen in New York and $1.1299-1300 and 131.11-15 yen in Tokyo late Wednesday afternoon.

       Tokyo stocks opened lower and extended losses, led by technology shares that tracked U.S. counterparts after the tech-heavy Nasdaq index fell over 3 percent overnight.

       "Investor sentiment was dampened because the minutes of the Federal Reserve meeting turned out to be more hawkish than market participants had expected," said Makoto Sengoku, senior equity market analyst at the Tokai Tokyo Research Institute.

       Following its two-day policy meeting in December, the Fed hinted at three interest rate hikes in 2022 to fight inflation in the United States. The minutes showed that officials mentioned raising them sooner than expected, as well as reducing the central bank's balance sheet.

       The recent increase in coronavirus infections in Japan also weighed on the market after nationwide cases topped 2,000 on Wednesday for the first time in over three months, brokers said.

       On the First Section, declining issues outnumbered advancers 1,885 to 230, while 70 ended the morning unchanged.

       Among technology issues, Tokyo Electron fell 1,930 yen, or 2.9 percent, to 65,530 yen, Olympus slid 96.0 yen, or 3.6 percent, to 2,557.5 yen and Screen Holdings dropped 460 yen, or 3.6 percent, to 12,240 yen.

       Fast Retailing was down 2,330 yen, or 3.6 percent, at 61,680 yen after the operator of the Uniqlo casual clothing chain said Wednesday its domestic sales in December fell from a year earlier as warm weather led to sluggish demand for winter clothing.

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