TOKYO (Reuters) - Japan's Nikkei share average fell to a one-month low on Thursday as a worldwide drop in government bond prices spread unease to Japanese stocks during this week's national holidays, compounded by a sell-off on Wall Street.

The Nikkei 225 dropped 1.3 per cent to 19,288.15 in mid-morning trade after falling to as low as 19,271.46, the lowest level since April 6. Markets were closed in Japan from Monday to Wednesday for the Golden Week holidays.

In the U.S., stocks fell on Wednesday after U.S. Federal Reserve chair Janet Yellen warned that long-term government debt is overpriced, adding to anxiety about future interest rates and a global bond rout.

"Hedge funds are unwinding their positions and selling Japanese shares which outperformed most of the global markets," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, adding that the Nikkei may fall below 18,500 in a month or so depending on foreign investors'positions.

Weak U.S. indicators also added to uncertainty over when the first rate hike by the Fed could take place. Figures published on Wednesday showed tepid private job gains and a second straight quarterly decline in productivity.

Exporters were weaker, with Toyota Motor and Honda Motor both dropping 1.0 per cent and Sony Corp declining 2.4 per cent.