Asian shares cautious, BOJ faces crunch policy decision

By Wayne Cole SYDNEY (Reuters) - Asian shares started cautiously on Monday as investors waited nervously to see if the Bank of Japan (BOJ) will defend its super-sized

stimulus policy at a pivotal meeting this week, while a holiday in U.S. markets made for thin trading. There were even rumours the BOJ might hold an emergency meeting on

Monday as it struggles to defend its new yield ceiling in the face of massive selling. That had markets in an anxious mood and Japan's Nikkei slipped 0.9% in early trading.

MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2%, with hopes for a speedy Chinese reopening giving it a gain of 4.2% last week. S&P 500

futures and Nasdaq futures both eased 0.1%, following a Wall Street bounce last week. Earnings season gathers steam this week with Goldman Sachs, Morgan Stanley and the

first big tech name, Netflix, among those reporting. World leaders, policy makers and top corporate chiefs will be attending the World Economic Forum in Davos and there are

a host of central bankers speaking, including no less than nine members of the U.S. Federal Reserve. The BOJ's official two-day meeting ends Wednesday and speculation is

rife it will have to make changes to its yield curve control (YCC) policy given the market had pushed 10-year yields above its new ceiling of 0.5%. The BOJ bought almost 5

trillion yen ($39.12 billion) of bonds on Friday in its largest daily operation on record, yet yields still ended the session up at 0.51%. However, it did try to get ahead

of speculative sellers by announcing it would do another emergency round today, suggesting it was determined to defend its yield policy at least for now.