Tokyo stocks open down with BoJ decision in focus

Tokyo stocks slipped early Friday as the yen rose sharply and investors focused on whether or not the Japanese central bank will unleash a fresh round of stimulus to kickstart sluggish growth.

The Bank of Japan's meeting, which wraps up Friday, is its first since Britain's vote to leave the European Union -- a shock decision that hammered global financial markets and triggered a yen rally that threatens Japan Inc's profits.

The BoJ's possible options include expanding its record asset-buying programme or cutting interest rates further into negative territory in a bid to boost lending and stoke the wider economy, analysts said.

"Generally speaking Japanese stocks are overbought in the short term," Juichi Wako, a senior strategist at Nomura Holdings, told Bloomberg News.

"I do expect the BoJ to add to easing measures, but there probably won't be a huge positive surprise."

In early trading, the benchmark Nikkei 225 index was down 0.20 percent, or 33.25 points, at 16,443.59, after fluctuating between positive and negative territory from the open.

The broader Topix index of all first-section shares was off 0.24 percent, or 3.18 points, at 1,303.82.

Japan on Friday published another batch of tepid inflation and spending data, heaping more pressure on the central bank to respond with new stimulus to boost the world's third-largest economy.

The BoJ's gathering comes after the government on Wednesday announced a whopping 28 trillion yen ($266 billion) stimulus package aimed at boosting sluggish growth.

Tokyo and the BoJ have come under increasing pressure as Prime Minister Shinzo Abe's more than three-year-old policy blitz, dubbed Abenomics, shows little sign of generating consistent growth.

On currency markets, the dollar slumped to 104.41 yen from 105.32 yen in New York ahead of the BoJ decision.

Traders tend to buy the yen as a safe bet in times of turmoil or uncertainty, but a stronger currency is bad for Japanese shares as it dents exporters' profitability.