Passersby are reflected on a stock quotation board at a brokerage in Tokyo, Sept. 29, 2015. Issei Kato/Reuters

By Lisa Twaronite

TOKYO (Reuters) -- Asian shares were down on Friday and on track for a weekly loss as investors grappled with the prospect of higher borrowing costs in the United States, as the Federal Reserve prepares to raise rates amid the backdrop of slowing global growth.

Data released overnight showed U.S. gross domestic product increased at a 1.5 percent annual rate, just shy of the consensus forecast for 1.6 percent growth and slowing from a 3.9 percent rise in the second quarter. But solid consumer spending kept alive the possibility that the Fed could deliver an interest rate increase in December.

On Thursday, the U.S. central bank held policy steady and left the door open to hike interest rates for the first time since 2006 at its Dec. 15-16 meeting.

That signal comes amid growing anxiety over a slowdown in global growth, with a wobbly China in particular triggering volatility in global markets in recent months.

MSCI's broadest index of Asia-Pacific shares outside Japan edged down 0.1 percent in early trading, poised to lose 2.5 percent for the week but gain more than 7 percent for October.

On Wall Street overnight, U.S. indexes posted losses but were still on track for their best monthly performance in four years.

Japan's Nikkei was down 0.2 percent, on track for a weekly of rise of 0.3 percent and a hefty monthly gain of 8.6 percent, as investors awaited the outcome of the Bank of Japan's policy meeting, expected some time later in the session, as well as the central bank's latest economic and price forecasts.

The BOJ is likely to trim its forecasts but stand pat with financial markets stable and no clear evidence yet that overseas headwinds are damaging corporate sentiment, say sources familiar with its thinking.

"We lean towards no change but can see why markets are on edge," said Sean Callow, senior strategist at Westpac in Sydney.

"This meeting includes the semi-annual outlook report, updating forecasts which will surely include an admission that it will take longer than previously thought for inflation to reach the 2 percent target," Callow said in a note to clients on Friday.

Data released before the Tokyo market opened underscored how far the BOJ has to go to approach its target, with Japan's core consumer prices falling 0.1 percent in the year to September, for their second straight month of declines.

Separate data showed an unexpected drop in household spending but tighter labor conditions, suggesting wages might rise in the months ahead.

The dollar was down 0.1 percent against the yen at 120.99 yen, but up about 0.9 percent for the month against the backdrop of divergent monetary policy expectations.

The euro's trend was similar, with the single currency adding about 0.1 percent against the dollar to $1.0986 but shedding about 1.7 percent for the month in which European Central Bank chief Mario Draghi took a surprisingly dovish stance that suggested further monetary easing steps were possible in December.

Crude oil futures slipped after the mixed U.S. economic data exacerbated fears of oversupply and as investors took profits following a rally, but they were still on track to end a volatile week with gains.

U.S. crude was down 0.5 percent at $45.82 a barrel, but was up nearly 3 percent for the week and 1.6 for the month, while Brent slipped about 0.4 percent to $48.63, up 1.3 percent for the week and 0.5 percent for October.

(Editing by Shri Navaratnam)