* Europe shares rise, Deutsche Bank down on revenue fall
* Japan stimulus lifts Asia shares, drives yen lower
* Oil falls, down 15 pct from June peak
* Eyes on Fed policy announcement at 1800 GMT
By Nigel Stephenson
LONDON, July 27 (Reuters) - Stocks rose in Europe and Asia on Wednesday while the yen sank against the dollar, after Prime Minister Shinzo Abe said his government would present a $265 billion stimulus package to reflate the Japanese economy.
The larger-than-expected figure helped lift Tokyo stocks 1.7 percent and Asian shares to one-year highs as investors looked ahead to a Bank of Japan meeting on Friday, with expectations running high it will take steps to ease monetary policy. shares were led higher by the auto .SXAP and luxury sectors, while Deutsche Bank DBKGn.DE dropped 4.6 percent after it unveiled sharply lower second-quarter revenues as low interest rates and volatile markets weighed on the business. pan-European STOXX 600 index .STOXX rose 0.5 percent and the FTSEurofirst 300 .FTEU3 0.4 percent. Britain's FTSE 100 index .FTSE gained 0.3 percent. Germany's DAX index .GDAXI rose 0.8 percent and has recouped all losses incurred since Britain's June 23 vote to leave the European Union.
For Reuters new Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS edged up 0.1 percent, having previously climbed to its highest level since Aug. 11, 2015. It has risen 10 percent so far this month.
Chinese stocks .SSEC .SZSC , however, had their worst day in six weeks on worries about new regulatory restrictions. DOLLAR DOWNSIDE?
In currency markets, the dollar JPY= rose nearly 1 percent to 105.70 yen, having risen as far as 106.54 at one point, after reports of the Japanese stimulus package.
"So far it looks like the Bank of Japan is not ready to do something new and that leaves the potential for more downside for the dollar before the meeting on Friday," said Thu Lan Nguyen, a currency strategist with Commerzbank (DE:CBKG) in Frankfurt.
Gains against the yen pushed the dollar up 0.1 percent against a basket of currencies .DXY before a policy announcement from the Federal Reserve later in the day.
The U.S. central bank is not expected to change policy this month but investors will scour its statement, due at 1800 GMT, for any hints on the timing of future rate hikes.
Stronger U.S. economic data of late has revived expectations of a Fed hike and markets see roughly an even chance of a rate rise in December.
Two-year U.S. Treasury yields US2YT=RR , seen most sensitive to higher rates, held close to four-week highs. By contrast Japanese two- and five-year government bond yields hit record lows JP2YTN=JBTC JP5YTN=JBTC of minus 0.37 and minus 0.38 percent respectively.
German 10-year Bund yields DE10YT=TWEB , the benchmark for euro zone borrowing costs, fell 1.2 basis points to just above minus 0.10 percent.
Oil prices fell, staying close to near three-month lows hit earlier this week on concerns about a glut of some products and slowing economic growth crude LCOc1 traded down 10 cents a barrel at $44.77. It has fallen some 15 percent since hitting an eight-month high in early June.
Gold XAU= held steady at $1,319 an ounce.