* Yen falls on BOJ's share buying decision
* Steps seen supporting stocks, lessening risk aversion
* BOJ Gov Shirakawa to hold news conference at 0530 GMT
By Masayuki Kitano
TOKYO, Feb 3 (Reuters) - The yen fell broadly on Tuesday after the Bank of Japan said it would start buying shares held by Japanese banks, stirring hopes for a rise in share prices and an easing of risk aversion.
The BOJ said it would start buying up to 1 trillion yen ($11.1 billion) worth of shares held by financial institutions, adding that BOJ Governor Masaaki Shirakawa would hold a news conference at 0530 GMT on Tuesday.
The BOJ said it would buy the shares up until April 2010 and only pick up shares rated BBB- or above by ratings agencies.
"When taken alone, this is positive for shares and is likely to lead to an easing of risk aversion. It is a factor that is positive for stocks and negative for the yen," said Tomoko Fujii, head of Japan economics and strategy for Bank of America in Tokyo. But the timing of the announcement, which came ahead of a scheduled BOJ policy board meeting on Feb. 18-19, raises questions, Fujii said.
"I am very curious as to why it came out today," she said, adding that focus may turn to the conditions of Japanese banks' balance sheets.
The dollar climbed to intraday highs near 89.90 yen, up from around 89.40 yen before the BOJ's announcement.
After trimming some of its gains, the dollar was at 89.73 yen, up 0.3 percent from late U.S. trading on Monday.
The euro rose 0.4 percent to 115.38 yen and inched up 0.1 percent against the dollar to $1.2860.
The yen is regarded as a safe haven currency as Japanese banks' losses from the credit market turmoil have been limited compared to their U.S. and European peers, and it tends to fluctuate in line with perceived shifts in risk appetite. ($1=89.75 yen) (Editing by Brent Kininmont)