* Investors focus on Jackson Hole Fed gathering this week
* Crude prices extend drop on fears recent rally overdone
TOKYO, Aug 23 (Reuters) - Japan's Nikkei share average slipped on Tuesday, pressured by a stronger yen and slumping oil prices, though trading was thin as investors awaited a Federal Reserve gathering later this week in Jackson Hole, Wyoming.
"It is a particularly egregious vacuum of data and events ahead of Jackson Hole, with all eyes on that particular event," said Stefan Worrall, director of Japan equity sales at Credit Suisse in Tokyo.
Global central bankers will gather for the Fed's annual mountain retreat from Thursday. Fed Chair Janet Yellen is slated to speak on Friday, and could offer clues on the timing of the U.S. central bank's next monetary policy move.
Wall Street ended little changed on Monday, in low volume trade, as investors fretted about the impact of weakening oil prices and the odds of whether the Fed will raise interest rates in the coming months.
The Nikkei stock index was down 0.3 percent at 16,557.41 in late morning trade, dampened by the effects of a stronger currency.
The dollar was down 0.1 percent at 100.22 yen, not far from levels under 100 yen touched last week.
"There is a chance that the 100-yen level will be broken again, which would put pressure on the Nikkei," said Yutaka Miura, senior technical analyst at Mizuho Securities in Tokyo.
Weaker oil prices also dented sentiment. Crude oil prices fell as analysts, including Goldman Sachs, warned that a price rally in August had been overdone, and that a proposed oil production freeze at current near record levels would not help rein in an oversupplied market.
Expectations of government stimulus lent some support to the wilting market. Japan's government is preparing a $33 billion supplementary budget to help fund Prime Minister Shinzo Abe's economic stimulus package, largely financed by construction bonds, according to a draft seen on Monday by Reuters.
Ono Pharmaceutical Co Ltd soared as much as 7.5 percent and was one of the most traded issues by turnover. It gained after business daily Nikkei reported that the company would start selling its Opdivo cancer drug as a blood cancer treatment covered by Japan's health insurance within the year, citing President Gyo Sagara.
The broader Topix was 0.3 percent lower at 1,300.25, and the JPX-Nikkei Index 400 was also down 0.3 percent at 11,686.11. (By Tokyo markets team; Editing by Jacqueline Wong)