Nikkei falls after Wall Street weakens, strong yen sours mood before BOJ
* All subsectors in negative territory
* Advantest shines after raising forecast
By Ayai Tomisawa
TOKYO, July 28 (Reuters) - Japan's Nikkei share average fell on Thursday morning after Wall Street ended lower and a stronger yen soured sentiment, while most investors stayed cautious amid the two-day Bank Of Japan policy meeting that ends Friday.
The Nikkei dropped 1.1 percent to 16,488.74 in midmorning trade.
U.S. shares languished after the Federal Reserve left interest rates unchanged, a decision widely expected from the market. The dollar skidded 0.5 percent to 104.91 yen.
Eyes are on the BOJ's meeting while many investors expect the central bank to expand monetary stimulus after Prime Minister Shinzo Abe on Wednesday unveiled a surprisingly large $265 billion stimulus package to reflate the economy.
"The best-case scenario for the market is that the BOJ decides to increase government debt purchases without cutting interest rates further into negative territory," said Hikaru Sato, a senior technical analyst at Daiwa Securities. "But the BOJ can't save its face if it does not cut rates into negative territory after it introduced the negative interest rate policy (in January), so we need to brace for such possibility, too."
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