* European stocks down about 1 pct, bank stocks lead
declines
* Oil headed for sixth straight session of declines
* Yen hits 20-month high vs dollar after BOJ stands pat on
policy
* Precious metals rise, gold hovers near 2 year high
By Vikram Subhedar
LONDON, June 16 (Reuters) - European stocks fell while oil
prices headed for a sixth session of declines on Thursday after
the Bank of Japan refrained from taking further stimulus steps,
hours after the Federal Reserve struck a cautious note on its
policy outlook.
Sterling GBPEUR= hit a 2-month low against the euro
underscoring worries that Britain, the world's fifth-largest
economy, could quit the EU after June's 23 referendum.
Concerns over Brexit have dominated markets this week and in
combination with dimmed expectations on global growth have
driven investors towards safe-haven assets such as German bunds
and gold and out of oil and stocks.
Brent crude LCOc1 prices, which last week hit their
highest this year, have fallen every day after June 8 and are
now down 8 percent since.
"The market is going to be soft until next week. The fear is
that if the British actually decide to leave the EU there may be
some sort of contagion," said Avtar Sandu, senior commodities
manager at Phillip Futures in Singapore.
"The rules for exit from the EU are not very clear. There
are a lot of question marks over the economic consequences," he
said.
Germany's 10-year bond yield DE10YT=RR fell to a new
record low as fading expectations for U.S. rate hikes this year
provided further fuel to a global bond market rally.
Spot gold XAU= climbed 1.4 percent and is close to hitting
a two-year high.
Earlier in the day Asian markets were firmly in "risk-off"
mode, with the yen surging to a 20-year high against the US
dollar and the Nikkei .N225 down more than 3 percent. Hong
Kong's Hang Seng index .HSI is down 2 percent.
Benchmark equity indices across Europe followed suit with
Italy's FTSE MIB .FTMIB down about one percent. The
pan-European FTSEurofirst 300 .FTEU3 fell 0.9 percent.
Shares of European banks .SX7P , the worst performing
sector this year, were on the backfoot again.
Shares of UBS UBSG.S and Credit Suisse CSGN.S fell more
than a percent after the Swiss National bank warned that both
banks will likely each need to raise an extra 10 billion Swiss
francs to meet new leverage requirements.
Deutsche Bank shares DBKGn.DE , down 2.5 percent, hit a
record low earlier in the day.
For Reuters new Live Markets blog on European and UK stock
markets see http://emea1.apps.cp.thomsonreuters.com/cms/?pageId=livemarkets&navid=10910942