* Nikkei gains 3.1% on short-covering as yen drops
* BOJ meets at 0000 GMT, Shirakawa news conference at 0530
* Gains could lose steam if no positive BOJ surprise-analysts
* Foreigners seen buying commodity-linked stocks-analyst
By Aiko Hayashi
TOKYO, Aug 30 (Reuters) - Japan's Nikkei average rose 3.1 percent on Monday after the yen slipped as the Bank of Japan began an emergency policy meeting and after revised second quarter U.S. GDP was less gloomy than expected.
Expectations that steps by Japanese authorities aimed at stemming strength in the yen led to short-covering, particularly in shares of exporters, though gains could lose steam if there are no major surprises from the BOJ meeting, market players said.
Some analysts questioned whether the central bank would take steps bold enough to stem a rise in the Japanese currency that hurts exports and may delay Japan's exit from deflation.
"Shares of exporter s are being buoyed mainly by short-covering after news of the BOJ's emergency meeting prompted buying of dollar/yen, though this policy news may run its course if the meeting doesn't yield major surprises," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.
BOJ Governor Masaaki Shirakawa will hold a news conference at 2:30 p.m. (0530 GMT) after the meeting. He will also meet with Prime Minister Naoto Kan in the afternoon, Jiji news agency said.
The BOJ is widely expected to loosen monetary policy by expanding its cheap fixed-rate loan programme for banks, which was put in place in December last year and expanded once in March.
"Foreign investors seem to be buying commodity-related stocks such as trading houses because some have already started to expect to see more liquidity in markets due to speculation for monetary easing both in Japan and the United States," said Kuramochi.
Last week, Federal Reserve Chairman Ben Bernanke also told central bankers at a conference in Jackson Hole, Wyoming the recovery has weakened more than expected but the U.S. central bank was ready to take further steps if needed to spur the recovery.
The benchmark Nikkei gained 274.33 points to 9,265.39, after rising 1 percent on Friday. It climbed closer to 9,350, near its 25-day moving average which has served as resistance this month.
The broader Topix advanced 2.4 percent to 839.56.
"We need to brace for the possibility that this policy news will have run its course after the result of the BOJ meeting is announced. A lot will still depend on the outlook for the U.S. economy," said Kazuhiro Takahashi, general manager at Daiwa Securities Capital Markets.
Japanese government bonds tumbled and the yield curve steepened sharply, hit by a jump in Tokyo shares as well as weaker U.S. Treasuries, and bonds may slip further if the BOJ eases policy and causes the yen to weaken.
On Friday, U.S. stocks gained 1.7 percent as strong buying interest at a key technical level and short-covering sparked the market's comeback.
Gross domestic product growth, the measure of total goods and services output within U.S. borders, was revised down to 1.6 percent, from 2.4 percent. Many economists had forecast an even bigger downward revision to 1.4 percent growth.
Shares of exporters led gains in the overall market as the dollar was traded at around 85.88 yen on trading platform EBS after the BOJ began its emergency policy meeting. The dollar hit a 15-year low of 83.58 yen last week.
Canon Inc jumped 3.7 percent to 3,630 yen and Kyocera Corp climbed 3.7 percent to 7,520 yen. Honda Motor Co advanced 3.5 percent to 2,910 yen.
Amid broad-based buying, trading houses rose with Mitsubishi Corp up 2.8 percent at 1,881 yen and Mitsui Co adding 2.4 percent to 1,154 yen.
Sojitz gained 2.9 percent to 142 yen after the Nikkei business daily reported the trading house would take part in the Chinese government's project to develop a large industrial park in Hebei Province. (Editing by Edwina Gibbs; Editing by Joseph Radford)