* Nikkei recovers 2 percent, Euro shares climb 0.3 percent
* Markets respond to upbeat US data, but sentiment fragile
ahead of Fed meeting
* Dollar gains foothold against yen; position-unwinding
By Marc Jones
LONDON, June 14 (Reuters) - Stocks recouped some of their
recent sharp losses and the dollar steadied on Friday, although
both were limping towards a fourth straight week of declines
driven by persistent doubts over central bank stimulus
Talk that the U.S. Federal Reserve, which meets next week,
could begin reducing its bond buying later in the year has
fuelled a selloff in global markets this week that has bruised
stocks, bonds, emerging market assets and the dollar alike.
The U.S. currency remained sluggish against the yen
and the euro on Friday morning but looked to have gained
a foothold against the Japanese unit around 95 yen, having
plunged to a two-month trough of 93.75 the previous day.
With better-than-expected U.S. retail sales data overnight
bringing some relief to markets and with the impact of the
selloff on riskier assets settling, top European stocks
climbed 0.3 percent as they tracked a rebound in Japanese
and Asian shares.
Markets have been spooked by the idea that the Fed could
start reeling in its support, which has helped drive up asset
prices over the last four years. But Philippe Gijsels, head of
research at BNP Paribas Fortis Global Markets, said with growth
patchy, he didn't expect a Fed move before the end of the year.
"If you have easy monetary policy and improving economic
conditions, which will also help companies to produce good
earnings, ... then you have a lot of the building blocks in
place (to drive stock market gains)," he added.
A number of major stock markets including MSCI's world
index have fallen for four straight weeks now,
with Europe on course for a drop of 1.5 percent this week.
Japan's Nikkei is nursing losses since mid-May of more than 15
percent despite rebounding 2 percent on Friday.
The Japanese stock market has been on a roller coaster ride
recently, hurt by the stimulus worries and an underwhelming
package of pro-growth measures unveiled by the government.
In Europe's debt markets, southern euro zone bonds
were back on the front foot after a
mixed run of sessions, while German Bunds were also up,
rising 43 ticks to add to this week's gains.
Rating agency Standard and Poor's helped sentiment towards
the euro zone periphery as it kept Spanish government debt above
'junk' status, although it left the country at risk of a
downgrade by maintaining a negative outlook on the bonds.
Commodities, especially metals, have largely avoided the
dramatic swings seen by equities and currencies this week but
have not been completely immune to the stimulus concerns.
Copper edged up to $7,094 a tonne as it inched off a
six-week low hit on Thursday, while precious metals gold
and platinum hovered near their recent lows.
Brent crude broke back above $105 a barrel for the
first time in more than a month, although analysts said the
volatile dollar would remain influential.
"The key driver of oil has been the weakness in the dollar
rather than any fundamental factors," said Ric Spooner, chief
market analyst at CMC Markets, who added that $106 would be a
tough barrier to crack.
"Traders are wary about pushing things higher because they
are confronted with a situation of plenty of supplies when
seasonal demand is supposed to pick up," Spooner said.