Tokyo shares open down 0.68%

Tokyo stocks opened down 0.68 percent on Monday after the Federal Reserve indicated it could go ahead with a rate hike in September despite concern over the market turmoil in China.

The benchmark Nikkei 225 index at the Tokyo Stock Exchange fell 129.34 points to 19,006.98.

"It's not yet clear if US interest rates will rise in September or December," Shoji Hirakawa, chief equity strategist at Okasan Securities, told Bloomberg News.

US stocks were choppy on Friday, with the Dow dipping and Nasdaq advancing as fears about a global economic slowdown due to China tested sentiment.

The Dow Jones Industrial Average shed 11.76 points, or 0.07 percent, to 16,643.01.

The broad-based S&P 500 added 1.21 points, or 0.06 percent, to 1,988.87, while the tech-rich Nasdaq Composite Index gained 15.62 points, or 0.32 percent, to 4,828.32.

Investors have been speculating that recent market turmoil sparked by China might push back the timing of a long-expected increase in the federal funds rate.

But Stanley Fischer, the Federal Reserve vice chair, said Friday a rate hike is still possible in September.

"The change in the circumstances which began with the Chinese devaluation is relatively new and we are still watching how it unfolds. So I wouldn't want to go ahead and decide right now," he said in a CNBC interview.

On currency markets, the dollar fell to 121.20 yen, from 121.52 yen in New York.