* Nikkei sheds 0.6 pct as investors eye key BOJ, Fed meetings
* Banks rise, bucking overall trend
* Kansai Electric, Calbee slump on disappointing earnings
By Daniel Leussink
TOKYO, July 30 (Reuters) - Japanese stocks dropped on Monday as possible changes this week in the Bank of Japan’s monetary policy weighed on sentiment while quarterly earnings were also in focus.
Japan’s Nikkei share average fell 0.56 percent to 22,584.70 while the broader Topix lost 0.29 percent to 1,770.54.
Investors were cautious ahead of key central bank meetings, including by the BOJ and the Federal Reserve.
The BOJ ends a two-day meeting on Tuesday amid speculation it could roll back its purchases in the Nikkei-linked exchange-traded funds.
Reuters and other media reported earlier that the BOJ could debate monetary policy changes at its meeting, with potential tweaks to its interest rate targets and stock-buying techniques on the table.
“Investors are eager to confirm the outcome of the BOJ’s policy decision,” said Mitsuo Shimizu, Japan stocks strategist at Aizawa Securities.
“If the BOJ makes a policy change, it is possible the yen will strengthen, which is likely to effect stocks in a negative way. That’s what investors are worried about,” he said.
Of Tokyo’s 33 sub-indexes, 21 traded in negative territory during the morning session.
Bucking the overall trend, the banking sector gained about 1.8 percent on hopes that the possible tweaks to the BOJ’s policy may benefit banks’ balance sheets.
Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group both jumped 1.9 percent and Mizuho Financial Group was about 1.3 percent higher.
The earnings reporting season is in full swing this week, and investors are keeping tabs on how firms fared in the first quarter.
Electric power supplier Kansai Electric Power Co slumped as much as 6.7 percent after the company reported weak April-June earnings.
Calbee fell as much as 9.0 percent after the snack maker’s quarterly earnings fell short of market expectations given the firm’s already high valuations.
Ricoh Co and Alps Electric Co surged as much as 10.5 and 8.3 percent, respectively, after posting positive earnings.
More than 1,000 firms will report earnings this week, with 175 announcing results on Monday, including Orix Corp and Tokyo Electric Power Co. (Editing by Simon Cameron-Moore)