TOKYO, Oct 4 (Reuters) -

Japan's Nikkei share average fell to an over four-month low on Wednesday, tracking overnight Wall Street declines as U.S. Treasury yields surged to fresh 16-year peaks.

The Nikkei dropped 2.3% to close at 30,526.88, after falling to 30,487.67 for the first time since May 18.

Of the Nikkei's 225 components, 212 fell, while 13 rose.

The Nikkei 225 volatility index climbed to its highest since June 15.

The broader Topix slid 2.5% to 2,218.89, exceeding the 2% threshold that generally prompts the Bank of Japan to buy exchange-traded funds later in the day to support the market.

Overnight, the U.S. S&P 500 dropped 1.4%, and stock futures indicated a further 0.5% decline. Benchmark 10-year Treasury yields pushed to a new high of 4.863% on Wednesday.

Data on Tuesday showed U.S. job openings unexpectedly increased in August, sending bond yields higher and raising bets for additional interest rate hikes by the Federal Reserve ahead of Friday's key monthly jobs report.

"There's so much uncertainty about the U.S. outlook, and that's weighing on Japanese stocks," Daiwa Securities strategist Kenji Abe said.

"There is a risk in the near term that the Nikkei falls below 30,000 - it's possible."

But Abe reiterated his forecast for the Nikkei to rise to 35,000 by end-March, predicting a potential positive shift in sentiment once the earnings season got underway.

Yaskawa Electric marks the unofficial start of the earnings reporting period on Friday, but the pace of announcements will not really pick up until October-end.

Among the Tokyo Stock Exchange's 33 industry groups, transport equipment makers fared worst, dropping 4.9%. Banking was another major loser, sliding 4.3%.

Chip-testing equipment maker Advantest slid 5%, while chip-making machinery giant Tokyo Electron fell 3.1%. (Reporting by Kevin Buckland; Editing by Rashmi Aich and Varun H K)