* Latest polls show support for "Remain" in Thursday's UK vote
* Sterling touches 2016 high, European shares climb
* Investors remain cautious as UK voters closely divided
* Various market volatility gauges flash amber
By Marc Jones
LONDON, June 23 (Reuters) - Sterling hit a 2016 high and world stocks climbed for a fifth day running on Thursday, as British voters headed to the polls for a crucial vote on their European Union membership.
Financial markets have been wracked for months by worries about what a potential Brexit would mean for Europe's stability but the latest opinion polls showing the "Remain" camp holding a small lead have provided some comfort.
The pound, which has been the lightning rod of Brexit opinion throughout the six-month campaign, was up 0.3 percent at $1.4765 GBP=D4 in early European trading having risen to its 2016 high of $1.4847 overnight.
In the equity markets, London's FTSE .FTSE was up 0.6 percent and neck and neck with German's DAX .GDAXI at the top of European leader board, both of which helped push MSCI's 46-country All World index higher. .MIWD00000PUS
"You look at the markets and they expecting a remain win, cable (sterling/dollar) at above $1.48 at one point this morning tells you it all," said Societe Generale (PA:SOGN) FX strategist Alvin Tan.
With the polls still incredibly tight and having proved unreliable in last year's UK election, caution remained however.
Share trading across Europe was just a third of its normal level and two-thirds lower than average on the UK's FTSE .FTSE Reuters data showed. (http://amers2.apps.cp.extranet.thomsonreuters.biz/apps/equities?st=Menu+G+C&s=GEQ03+AP+7Z&grviewsurl=GzEQxOV#/Explorer/GzEQzINDICESxOV?s=GEQ04%2BAP%2B7Z)
Away from the Brexit debate, Norway's crown jumped to a 10-day high as its central bank kept interest rates steady.
Traders were also digesting disappointing June euro zone PMI data as a surprising bounce in manufacturing activity couldn't offset a marked slowdown in service industry growth.
That came ahead of the results of the first of the European Central Bank's revamped long-term loan offers. It is now effectively paying banks to lend the cash they take to the euro zone's firms and consumers.
Wall Street was expected to reopen around 0.5 percent higher later ESc1 . Overnight MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS ended up 0.3 percent with Tokyo's Nikkei .N225 nearly 1 percent higher.
"Most people at this point expect a rise in the market" on expectations the vote will favour Britain staying in the EU, said Isao Kubo, an equity strategist at Nissay Asset Management.
"But you never know, and it will be clear by tomorrow so you don't want to take new positions now."
(Latest Reuters news on the referendum, including full multimedia coverage: Brexit vote nerves kept safe-haven government bonds firm with 10-year German and Japanese bonds yielding 0.05 percent DE10YT=TWEB and 0.13 JP10YT=RR percent respectively compared to 1.70 percent for U.S. Treasuries US10YT=RR .
Spot gold XAU= hit a two-week low of $1,260.36 an ounce though and the main market 'fear-gauge' the VIX volatility index .VIX saw its biggest drop in a month. .V2TX
Investors were heading to the sidelines ahead of the referendum as a closely fought vote meant any large positions taken before the outcome was vulnerable to being stopped out. A Bank of America Merrill Lynch (NYSE:BAC) fund manager poll last week found investors' cash levels at their highest since November 2001.
Some investors such as George Soros expect the value of the British pound to decline by as much as 15 percent from current levels in the event of a British exit from the EU. demand for the perceived safe-haven yen remained broadly intact with the dollar adding just 0.2 percent to 104.63 yen JPY= , while the euro gained 0.6 percent to 118.67 yen EURJPY= .
The euro rose 0.4 percent to $1.1334 EUR= , while the dollar index, which tracks the greenback against a basket of six rival currencies, slipped 0.25 percent to 93.479 .DXY .
"It will be hard for the market to move until the poll results are released. The pound obviously will take centre stage. But other European currencies and particularly dollar/yen also bear watching as the pair will reflect swings in risk sentiment," said Shin Kadota, chief Japan FX strategist at Barclays (LON:BARC) in Tokyo.
Before the vote, exchanges and market regulators moved in to tighten risk management systems. Singapore's stock exchange SGXL.SI said it has raised the amount of cash firms must pledge to cover trading positions while central banks stood by to pump in emergency cash.