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Tokyo stocks down by break, eyes on BoJ decision

Tokyo - Tokyo stocks slipped on Friday morning on a strong yen as investors nervously await the conclusion of the Bank of Japan's (BoJ) policy meeting to see if it will ramp up its economic stimulus programme.

The meeting is the central bank's first since Britain's vote to leave the European Union, which hammered global financial markets and triggered a yen rally that threatens Japan’s profits.

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

Expectations for fresh monetary easing measures since the Brexit vote on June 23 saw the yen sink more than seven percent this month as dealers bet on fresh cash flooding the market.

But the currency has picked up in recent sessions as they grow concerned Friday's announcement may fall short.

And a government promise of ¥23trn in stimulus announced Wednesday did little to fire excitement.

"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."
The benchmark Nikkei 225 index ended the morning 65.45 points, lower at 16 411.39, while the broader Topix index of all first-section shares was off 5.02 points, at 1 301.98.

The need for fresh help was highlighted on Friday morning by the release of another batch of tepid inflation and spending data indicating Prime Minister Shinzo Abe's more than three-year-old policy blitz shows little sign of generating a consistent recovery.

The dollar slumped to ¥104.20 from ¥105.32 in New York.

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.

Nintendo fell 0.73% to ¥20 925 following a 5.5% slump on Thursday after the videogame giant logged a huge first-quarter net loss, despite the Pokemon Go mania sweeping the globe since its launch this month.

SoftBank rose 2.18% to ¥5 483 after it said net profit jumped 19% in its fiscal first-quarter owing to gains from selling some of its stake in Chinese e-commerce giant Alibaba.

Toyota eased 1.16% to ¥5 791 while Nissan dropped 2.14% to ¥1 002.

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