(Updates at 0835 GMT)

By Alun John and Stella Qiu

LONDON/SYDNEY, Aug 23 (Reuters) - World shares steadied

on Friday, sitting just 1% shy of all-time highs, while the

dollar languished around one-year lows ahead of a speech by the

world's most powerful central banker which markets will peruse

for guidance on the shape of U.S. rate cuts.

Europe's broad Stoxx 600 index rose 0.14% in early

trading, Asian shares outside Japan nudged down 0.1%, but

Japan's Nikkei gained 0.4% as investors digested

inflation data and remarks from Bank of Japan governor Kazuo

Ueda flagging a willingness to raise interest rates if the

economy and inflation turn out as forecast.

That left MSCI's all country world index up

a whisker, and with early August's turmoil in the rear view

mirror, it is now trading around 1% off its mid July all time

peak. S&P500 futures rose 0.3%.

The main event of the week is still to come however: Federal

Reserve Chair Jerome Powell's keynote speech to the Kansas City

Fed's annual Jackson Hole Research conference, which comes as

U.S. economic data gives the Federal Reserve the green light to

cut interest rates.

Markets are fully priced for a 25 bp rate cut in September

and see a cut at each of the Fed's three remaining meetings this

year, and for one to be a larger 50 bp move.

The speech will be watched carefully to see whether it

challenges or underscores such pricing, though Powell's

opportunities to give too much of a surprise seem limited.

"As any decision that deviates from market pricing will rest

on as yet unknown data, it is hard to see how Powell can commit

to much beyond some easing of some sort in September, and even

then, only barring data accidents," said Rob Carnell, regional

head of research, Asia-Pacific, at ING.

Expectations that rate cuts are coming have kept U.S.

Treasury prices supported and not giving back their safe-haven

gains from early August.

The benchmark 10 year Treasury yield was flat at 3.857% - it

has only been above 4% for a very brief period in August, after

spending almost all of 2024 there.

Its German equivalent was also steady at 2.25%.

The low U.S. yields have hurt the dollar, which has lost

ground on almost all major peers in August.

The euro was last at $1.1119, steady on the day

and just off a 13 month peak hit earlier this week, and sterling

was up 0.2% at $1.312, struggling to push through its

July 2023 level, which would take it to its highest in well over

two years.

The Japanese yen gained with the dollar down 0.3% at 145.85

after Bank of Japan Kazuo Ueda flagged an willingness

to raise interest rates if the economy and inflation turn out as

forecast.

"The yen buying today is understandable given Governor Ueda

showed very little sign of a shift in the views and plans of the

BoJ following the financial market turmoil earlier this month,"

said Derek Halpenny, head of research global markets EMEA at

MUFG in a note to clients.

Data out early in the day showed Japan's core inflation

accelerated for a third straight month, but a slowdown in

demand-drive price gains suggest no urgency for any immediate

rate hikes.

Commodities looked set to end the week lower.

Brent crude futures were up 0.5% at $77.59 a barrel,

although they are down more than 3% for the week as swelling

U.S. crude stocks and a weakening demand outlook in China have

raised pessimism.

Gold prices are up 0.5% to $2,496.6 an ounce,

recharging towards its record high of $2,531.6 hit just on

Tuesday.