* Market speculates BOJ could ease as soon as Friday
* Japan industrial output, consumer price soft
* Fanuc falls 12 pct, hit by weak demand in China
TOKYO, Jan 29 (Reuters) - Japanese shares slipped on Friday as investors cautiously looked to whether the Bank of Japan will step up its stimulus later in the day.
Fanuc shares fell 12 percent after the robot maker unexpectedly cut its earning forecast, helping to push down the Nikkei share average 0.4 percent to 16,973.01 while the broader Topix dipped 0.1 percent to 1,391.21.
Speculation is rife the Bank of Japan will have to add yet more stimulus to support Japan's flagging growth and weakening inflation outlook.
"All eyes will be on the BOJ at the moment. Policymakers now have the difficult decision of steering into the wind and taking decisive action amid global instability, or sticking to the program and risking further defamation in the court of public opinion," said Martin King, co-managing director at Tyton Capital Advisors.
While many doubt new measures it will come out of first policy meeting of the year, investors are cautious given BOJ Governor Haruhiko Kuroda has tried to surprise markets in the past.
Prime Minister Shinzo Abe may also need a fresh boost to his "Abenomics" drive after Economy Minister Akira Amari resigned abruptly on Thursday to take responsibility for a political funding scandal.
Data published earlier on Friday reinforced concerns about the economy, with industrial output falling more than expected and consumer prices in the Tokyo area showing unexpected weakness, boosting the case for BOJ action on Friday.
But many analysts also suspect the BOJ is wary of using its diminishing options to counter what they see as factors beyond the BOJ's control, such as the fall in oil prices or slowdown in China.
The impact of weak demand in China hit Fanuc, which on Thursday cut its operating profit estimate for the year to March by 3.8 percent.
Omron Corp shares fell 15 percent after the machine maker cut its earning guidance, also citing weak demand for parts for smart phones and other products in China.
On the other hand, investors picked up defensive shares such as food companies, which rose 1.0 percent.
Yamato Holdings rose 6.8 percent after share buy-back announcement. Tokyo Disney Resort operator Oriental Land Corp also gained 3.9 percent after it reported an increase in profits after price hikes.
The JPX-Nikkei Index 400 fell 0.3 percent. (Reporting by Hideyuki Sano and Joshua Hunt; Editing by Eric Meijer)