* Nikkei rises over 3 pct, but pares gains after BOJ decision
* BOJ's move seen halfhearted at best - analysts
By Elaine Lies
TOKYO, Aug 30 (Reuters) - Japan's Nikkei average pared gains on Monday after rising more than 3 percent at one point, with investors disappointed by a Bank of Japan decision that contained no surprises and was seen as lacklustre at best.
At an emergency meeting, the BOJ expanded its fund supply tool, saving more aggressive steps for when there is clearer evidence of a slowdown in a fragile economy hit by a strong yen.
But analysts questioned whether the central bank's action would do much to help to stem a rise in the Japanese currency that hurts exports and may delay Japan's exit from deflation, noting that most of the steps it took had already been widely expected.
"This is better than nothing, but still disappointing. There's little content in this message," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Morgan Stanley Securities.
"Certainly there's some thinking that the BOJ wants to save its stronger measures for later, but if you look at what the yen and stock market have been doing lately I wonder if this is really such a good decision. Things are already tough."
The Nikkei was up 1.8 percent or 164.07 points to 9,156.17 after earlier rising more then 3 percent or as far as 9,280.70, roughly 300 points, on short-covering,
The broader Topix rose 1.4 percent to 830.75, also off earlier highs.
The dollar hit a 15-year low of 83.58 yen last week, when the benchmark Nikkei fell to a 16-month low. The greenback was trading at 85.41 yen after the decision.
BOJ Governor Masaaki Shirakawa will hold a news conference at 2:30 p.m. (0530 GMT). He will also meet with Prime Minister Naoto Kan in the afternoon.
Shares got their initial upward impetus from gains made by U.S. stocks on Friday, when they rose 1.7 percent as strong buying interest at a key technical level and short-covering sparked the market's comeback.
Also helping was a less gloomy revision for U.S. GDP than expected. Second-quarter gross domestic product growth 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.
Exporters held onto gains, although they were off earlier highs.
Canon Inc rose 2.4 percent to 3,590 yen and Kyocera Corp climbed 2.6 percent to 7,440 yen. Honda Motor Co advanced 2.2 percent to 2,872 yen. (Editing by Edwina Gibbs)