By Richard Hubbard
LONDON (Reuters) - World shares, the euro and German bonds barely moved on Wednesday as investors turned cautious before this week's policy decisions by the Bank of Japan and European Central Bank, followed by U.S. jobs data.
However, U.S. stock futures pointed to a firmer open on Wall Street where both the Standard & Poor's 500 Index and the Dow posted record closing highs on Tuesday, while rising oil stockpiles sent crude prices lower.
On Thursday the ECB is forecast to leave interest rates unchanged but expectations are high that Japan's central bank will announce a forceful monetary easing to try to boost its recession-bound economy.
America's nonfarm payrolls report is likely to confirm market views that the Federal Reserve will maintain its extremely accommodative monetary policy, which has underpinned investor sentiment all year.
"People ... are keeping their positions quite tight ahead of central bank meetings and data later this week," Ioan Smith, strategist at Knight Capital, said. "Even though the chances of a surprise may be small, you don't want to be caught the wrong way if there is one."
Before all these events European equity markets were taking a breather, having posted big gains on Tuesday. The FTSE Eurofirst 300 index of top European shares was unchanged by midday, after surging 1.3 percent the previous day.
London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX were around 0.2 percent lower, giving back a little of Tuesday's strong gains.
The MSCI world index, which covers over 9,000 shares in 45 countries, was flat at 360.2 points but is hovering just below levels last seen in 2008.
Japan's Nikkei average was the stand out performer, soaring 3 percent for its biggest one-day rise in two months as the expectations of easier policy from new BoJ Governor Haruhiko Kuroda encouraged demand for export-oriented firms.
Some investors have warned about expecting further strong gains in equity markets after the first quarter when many major market indexes reached record or near-record highs, propelled by the loose policies of global central banks.
"I'd be sceptical about continuing the stronger momentum that we saw in the first quarter just because it very rarely happens you get two such strong quarters in a row," said Tom Elliott, global strategist at JP Morgan Asset Management. "I think what we'll be seeing is probably investors over the next three months looking for any slight excuse to take profits."
In the first quarter the benchmark U.S. S&P 500 index rose 10 percent to a record high, while MSCI's broad world equity index gained almost six percent.
In the debt market German Bund futures were little changed despite a successful sale of 3.28 billion euros of new five-year bonds by the government, which attracted demand from investors still fretting about Cyprus's messy bailout.
The sale came at a yield of 0.33 percent, the lowest at any German five-year bond auction in 8 months. Markets then were in full-blown crisis mode and anticipating that ECB bond buying would be needed to prop up Spain and Italy.
"The average yield continues to decline which is a reflection of the fact that investors are still prepared to put money into German government bonds despite the low yield," said Nick Stamenkovic, strategist at RIA Capital markets. "That probably shows the ongoing niggling concerns about Cyprus and political uncertainty in Italy."
The euro was flat at $1.2820, staying near a four-month low of $1.2750 set last week as the currency remained pressured by the concerns about Cyprus and weak euro zone economies.
Against the yen, the dollar was close to unchanged at 93.43 yen, holding above its one-month low of 92.57 yen set on Tuesday.
"The story of the day is the market will be reluctant to do anything because it's scared of being caught wrongfooted by what comes out of Japan... and the ECB meeting tomorrow," said Daragh Maher, FX strategist at HSBC.
In commodity markets, gold fell for a second day to touch a four-week low of $1,563.06 an ounce, near to the 2013 nadir hit on February 21 of $1,554.49, which was a six-month low.
"There is scope for gold to strengthen if economic data isn't as strong as people are hoping, but at the moment, there's a lack of justification to buy in the short term," Mitsui Precious Metals analyst David Jollie said.
Copper hit its lowest level in eight months as concerns about weak global demand encouraged speculators to step up selling before a two-day holiday in China.
Three-month copper on the London Metal Exchange fell by 0.3 percent to $7,422.25 a tonne , having earlier touched $7,404.50 a tonne, the lowest price since August 20.
Downbeat U.S. manufacturing data released earlier this weak has raised concerns about the pace of a recovery in the world's largest economy.
LME aluminium fell to a seven-month low, lead to a five-month low and nickel to its lowest in four months.
(Additional reporting by Alistair Smout, Nia Williams and William James in London,; editing by David Stamp)