TOKYO, Sept 21 (Reuters) - Japan's Nikkei share average ended more than 1% lower on Thursday, as technology heavyweights tracked their U.S. peers' declines after the Federal Reserve stiffened its hawkish stance with a further interest rate hike projected by the year-end.

The Nikkei fell 1.37% to 32,571.03 in its sharpest daily decline since Aug. 25, with chip-testing equipment maker Advantest shedding 2.65% to become the biggest drag.

Chip-making equipment maker Tokyo Electron slipped 1.09% and technology start-up investor SoftBank Group lost 3.17%.

Overnight, the S&P 500 and Nasdaq Composite slumped after the Fed held key interest rates unchanged as widely expected, and revised economic projections higher with warnings that the battle against inflation was far from over.

"Japanese heavyweight technology stocks tracked declines in the S&P and Nasdaq, and pushed the Nikkei lower," said Shuutarou Yasuda, a market analyst at Tokai Tokyo Research Institute.

The broader Topix fell 0.94% to 2,383.41, with the nation's biggest banks limiting the decline.

Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group provided the biggest support to the Topix, rising 1.31%, 1.21% and 0.94% each.

The banking index rose 1.03%.

The utilities rose 1.38% to become the top performer among the Tokyo Stock Exchange's 33 industry sub-indexes.

Tokyo Electric Power Holdings jumped 5.07% to become the top gainer on the Nikkei.

The Topix growth index, which tracks shares with higher growth potential, fell 1.42%, while the Topix value index for companies with slower growth but higher dividend payouts fell 0.52%.

Among the 225 components on the Nikkei, 54 shares rose, 171. (Reporting by Junko Fujita; Editing by Subhranshu Sahu and Janane Venkatraman)