GLOBAL MARKETS-Stocks Gain Slightly, Dollar Rises Against Yen After BoJ Decision

GLOBAL MARKET - NEW YORK/LONDON, Jan 23 (Reuters) - MSCI'S global equities index gained very slightly as investors digested a mixed crop of earnings reports and waited for key economic releases due later in the week while the yen fell after the Bank of Japan left monetary policy unchanged.

While the dollar index climbed to a six-week high, U.S. Treasury yields rose as investors waited for economic growth and inflation data for clues on when the Federal Reserve will decide to cut interest rates.

Oil prices on Tuesday handed back some of the previous day's gains, as traders weighed production outages in the U.S. and tensions in the Middle East and Europe against rising crude supply in Libya and Norway.

The MSCI world equity index .MIWD00000PUS, which tracks shares in 49 nations, gained 0.14% after hitting its highest level since late December on Monday. The Dow Industrial Average was down while the Nasdaq rose slightly.

"It's not surprising markets are taking a step back today and hitting the pause button," said Anthony Saglimbene, chief market strategist at Ameriprise Financial, citing recent market strength and caution ahead of economic data releases and earnings reports from megacap technology companies.

S&P 500 was barely higher for much of the session but still managed to register its third consecutive record closing levels. Economic data due out later this week includes fourth-quarter GDP and the December reading of Personal Consumption Expenditure (PCE), Federal Reserve's favored inflation measure.

The Dow Jones Industrial Average .DJI fell 96.36 points, or 0.25%, to 37,905.45. It was dragged down by a 11% drop in 3M MMM.N shares after it forecast dour annual earnings due to weak demand. In contrast Verizon CommunicationsVZ.N shares rose 6.7% after it released a strong annual profit forecast.

The .SPX gained 14.17 points, or 0.29%, to 4,864.60 and the .IXIC gained 65.66 points, or 0.43%, to 15,425.94. Earlier Europe's STOXX 600 .STOXX index had closed down 0.28%.

Currency trading was volatile after the Bank of Japan kept interest rates in negative territory, but signalled conviction that conditions for phasing out its ultra-loose monetary policy were falling into place.

In afternoon trading the dollar was up 0.18% against Japan's yen at 148.35 JPY=. Earlier in the day the greenback had fallen to a low of 146.97 yen.

The dollar index .DXY, which tracks the U.S. currency against a basket of six currencies, after hitting its highest level since Dec. 13, was last up 0.17% at 103.54.

In Treasuries, the yield on benchmark 10-year Treasury notes US10YT=RR rose to 4.1378% compared with its U.S. close of 4.094% on Monday. The two-year yield US2YT=RR, which rises with traders' expectations of higher Fed fund rates, touched 4.3784% compared with a U.S. close of 4.376%.

The European Central Bank (ECB) meets on Thursday and is expected to hold monetary policy steady. The Fed is also expected to keep rates steady when it meets next week, but investors will watch for clues on the timing of rate cuts.

Investors will also monitor U.S. Treasury's announcement of funding needs for the coming quarter next week.

U.S. crude CLc1 settled down 0.5% to $74.37 a barrel. Brent crude LCOc1 finished down 0.64% at $79.55 per barrel.

Spot gold XAU= rose 0.33% to $2,027.99 an ounce investors waited for economic data and clarity on Fed policy.

Earlier, Hong Kong stocks .HIS staged a rebound to close up 2.6% after slumping the previous session, when foreign outflows gathered pace and short selling surged.

After China's cabinet pledged to take measures to stabilise market confidence, the Shanghai SE composite index .SSEC showed a muted recovery, rising 0.5%, after touching a five-year low on Monday. One option is mobilising some 2 trillion yuan ($278.53 billion) to support the stock market, Bloomberg News reported.

"The one positive for the market today was the suggestion China would be moving towards supporting their stock market," said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

(Additional reporting by Stella Qiu in Sydney and Ankur Banerjee in Singapore; Editing by Kim Coghill, Bernadette Baum, Chizu Nomiyama, Nick Macfie and Aurora Ellis)