By Leika Kihara

TOKYO (Reuters) - Japanese companies' inflation expectations fell slightly in June from three months ago, the Bank of Japan's tankan survey showed, adding to growing doubts over its argument that aggressive money printing will accelerate price growth to its 2 percent goal.

The data on inflation expectations came after Friday's tankan sentiment survey showed business confidence was subdued in the second quarter, heightening pressure on the BOJ to roll out yet more stimulus to ease the pain from a strong yen.

Companies expect consumer prices to rise an average 0.7 percent a year from now, down 0.1 percentage point from three months ago and some way off the BOJ's 2 percent target, the tankan survey on price expectations showed on Monday.

The survey underscores the challenges the BOJ faces in trying to achieve its target by flooding the economy with cash, on hope that doing so would prompt companies and households to spend now on expectations that prices will rise in the future.

"The BOJ will probably have to cut its inflation forecasts again and in doing so may ease this month," said Mari Iwashita, chief market economist at SMBC Friend Securities.

"But it's hard to explain why further easing would help the economy, when bond yields are already so low," she said.

The stiff challenge posed by the yen's rise on exports and weak inflation have heightened market expectations that the BOJ will expand stimulus at its next rate review on July 28-29.

Recent surveys have shown companies are becoming reluctant to raise prices or even cutting them on weak consumption, casting doubt on the BOJ's view that a broad uptrend in inflation is intact.

But many policymakers, struggling to battle external headwinds with a dwindling tool-kit, are wary of expanding stimulus any time soon.

"Monetary policy has done more than enough," said former BOJ board member Sayuri Shirai. "I can't see why the BOJ needs to ease more when the effects of its existing steps are distorting the yield curve."

Firms polled in the tankan said they expect consumer prices to rise an annual 1.1 percent three years from now, unchanged from the projection in March.

In five years' time, companies expect consumer prices to rise an annual 1.1 percent, lower than a 1.2 percent increase projected in the previous survey.

The BOJ added negative interest rates in February to its massive stimulus program, under which it prints 80 trillion yen ($780.9 billion) a year to buy government bonds.

But the core consumer price index, which strips away the effect of volatile fresh food costs, fell 0.4 percent in May from a year earlier, marking the biggest drop since the BOJ deployed its huge asset-buying program in 2013.

($1 = 102.4500 yen)

(Editing by Shri Navaratnam and Richard Borsuk)