GLOBAL MARKETS-Asia shares slip, Nikkei recovers, yen rises as BOJ disappoints

(Corrects headline and lead to show Japanese stocks recovered)

* Asia share index slips after touching highest since Aug 2015

* Nikkei recovers after earlier declines on ETF purchase prospect

* Yen rises as scope of BOJ stimulus disappoints

* Europe set to open flat to higher

* Oil prices hit 3-month lows, WTI down 20 pct from 2016 peak

By Nichola Saminather and Hideyuki Sano

SINGAPORE/TOKYO, July 29 (Reuters) - Asian shares slipped after touching a near one-year peak on Friday and the yen strengthened as the Bank of Japan's fresh stimulus measures disappointed markets, although Japanese stocks recovered on higher purchases of exchange-traded funds.

European markets are set to be positive, with futures pointing to a flat start for Britain's FTSE 100, and higher opens for Germany's DAX and France's CAC 40 .

The BOJ doubled purchases of ETFs (Shenzhen: 395013.SZ - news) , but maintained its base money target at 80 trillion yen ($775 billion) and the pace of purchases of other assets, including Japanese government bonds.

The central bank also held at 0.1 percent the interest it charges to a portion of excess reserves financial institutions leave with the central bank, while saying it would thoroughly assess the effects of negative interest rates and its asset buying program.

"The fact that the Bank of Japan eased policy is acknowledged, but it was just ETF buying, and the overall impression was that it was not enough and investors were disappointed," Takuya Takahashi, a strategist at Daiwa Securities, said.

"ETF buying has a direct positive impact on the stock market but its decision to hold off bond buying hit the dollar-yen."

Japan's Nikkei, which swung between gains and losses after the announcement, recovered to trade up 0.6 percent.

The index, which touched a seven-week high last week, was on track for a 0.4 percent weekly drop, but a gain for July of 6.4 percent.

The dollar weakened 1.5 percent to 103.67 yen, its biggest one-day decline since June 24, after the UK's decision to leave the European Union.

Before the BOJ's decision, many investors warned of a big chance of disappointment because markets have long expected more stimulus, making it difficult for BOJ Governor Haruhiko Kuroda to spring a surprise.

MSCI (NYSE: MSCI - news) 's broadest index of Asia-Pacific shares outside Japan pulled back 0.4 percent after hitting the highest level since Aug. 11, leaving it on track for gains of 0.9 percent for the week, and 5.4 percent for the month.

Wall Street shares remained near all-time highs, with tech heavyweights Alphabet (Xetra: ABEA.DE - news) and Amazon rising after the bell as their earnings beat expectations .

The stronger yen also weighted on the dollar index, which slipped 0.3 percent to 96.425, putting it on track for a slide of 0.5 percent for the week, but a gain of 0.3 percent for the month.

European shares fell on Thursday, as markets awaited the release of the stress test results on European banks on Friday night.

The euro climbed 0.1 percent to $1.1084. It is up 1 percent this week, but poised for a 0.2 percent loss in July.

Elsewhere in markets, oil prices fell to fresh three-month lows, with U.S (Other OTC: UBGXF - news) . benchmark now down more than 20 percent from this year's peak on growing worries that the world might be pumping more crude than needed.

U.S. crude futures fell to as low as $40.95 per barrel and were last down 0.5 percent at $40.92. It's set for a drop of 7.5 percent for the week and 15.4 percent in July.

International benchmark Brent crude futures dropped 0.6 percent to $42.45. It is down 7 percent this week and 14.6 percent this month.

"Investors have become overly bearish on oil as U.S. production and gasoline inventories continue to rise. We think those concerns are unwarranted. Underlying demand in the U.S. remains robust," ANZ bank said. (Additional reporting by Leika Kihara, Ayai Tomisawa and Henning GLoystein; Editing by Richard Borsuk and Simon Cameron-Moore)