* MSCI World index flat as corporate earnings eyed
* Brighter economic outlook supporting recent share gains
* Euro, dollar extend falls vs yen despite BOJ steps
* Vote on U.S. debt ceiling awaited
By Richard Hubbard
LONDON, Jan 23 (Reuters) - World shares hovered near 20-month highs on Wednesday, supported by some upbeat corporate earnings, an easing of fears about the U.S. debt ceiling and a better outlook for the global economy.
But investors appeared to be reluctant keep buying, with many major equity indexes already close to levels unseen since the financial crisis began five years ago, despite only a modest recovery in global growth forecast for this year.
"In terms of the market, the crisis is over, but in terms of the real economy, we still have to live through some of the effects," said Nick Kounis, head of macro economic research at ABN AMRO.
However, he added: "We think enough has been done to sow the seeds of a gradual economic recovery this year which will gain pace next year."
Europe's FTSEurofirst 300 index was little changed near a 22-month high on Wednesday. Germany's DAX, which is close to a 2008 high, was up 0.2 percent, and Britain's FTSE 100 index gained 0.1 percent, having briefly reached a 2013 peak.
U.S. stock indexes pointed to a flat performance as well by Wall Street, where both the S&P 500 and Dow Jones industrial average hit five-year closing highs on Tuesday.
The focus in the major share markets was on corporate earnings. Mining giant BHP Billiton pointed to solid iron ore demand from steelmakers, and consumer goods conglomerate Unilever reported strong sales growth.
Those upbeat reports were offset to some extent by a weak performance by the telecom sector.
U.S. markets are waiting for reports from Dow index members McDonald's Corp and United Technologies. Tech giant Apple reports after the market closes.
Overall, of the 13 percent of companies on the S&P 500 index that have reported results so far, 75 percent have met or beaten forecasts, according to Thomson Reuters StarMine.
In Europe, only 2 percent of all STOXX Europe 600 firms have announced results, but 86 percent of them have met or beaten expectations.
The European debt markets were still basking in the glow of Tuesday's strong 10-year bond sale by Spain, which was swamped with demand from foreign investors. Portugal is expected to return to the debt market this week for the first time since its 2011 bailout.
German 10-year yields were 1.5 basis points lower . Traders said this was in part a result of some investors looking to balance their portfolios as the month-end approached, following recent gains in peripheral debt.
Prices have risen across the euro zone debt market this month as foreign investors returned, reassured by the European Central Bank's policies to support the region and a strong desire for higher yielding assets.
U.S. debt prices held firm on expectations that a proposed debt-limit extension by the Republican party will be approved, with the prospect of nearly four more months of uncertainty balancing out short-term relief at the measure.
Ten-year benchmark U.S. Treasury note yields were at 1.83 percent - comfortably within their recent 1.8 to 1.9 range.
"Although the immediate threat of a default has gone, at the same time the deadline has moved up to May and we're going to be stuck with fiscal uncertainty for longer," said Philip Marey, strategist at Rabobank in Utrecht.
Meanwhile, the yen pushed higher against the dollar and the euro as monetary easing announced in Japan on Tuesday by the central bank failed to meet the expectations of some investors.
The Bank of Japan doubled its inflation target to 2 percent and adopted an open-ended commitment to buy assets starting in 2014, but those easing steps were less immediate than some in the market expected.
"We had a substantial move (in the yen) getting into the BOJ meeting. Subsequent questions are being raised whether the BOJ can achieve what it wants to and what are the implications of its policies," said Audrey Childe-Freeman, head of foreign exchange strategy at BMO Capital Markets.
The dollar fell 0.2 percent to 88.52 yen, off a 2-1/2 year high of 90.25 yen on Monday, while the euro was steadier against the Japanese unit at 118.25 yen.
The euro was up 0.2 percent against the dollar to $1.3342, near last week's 11-month high of $1.3404 after European Central Bank president Mario Draghi said "the darkest clouds over the euro area subsided" in 2012.
Oil prices were mostly steady as investors awaited inventory data from the United States for clues to demand in the world's largest oil consumer.
Brent crude rose 12 cents at $112.54 a barrel while U.S. crude for March rose 13 cents at $96.81, off a four-month high of $96.90 hit earlier.
Copper was also barely changed on Wednesday, despite higher output reported by mining groups such as BHP Billiton. Three month copper on the London Metal Exchange was up 0.1 percent at $8,142 a tonne.