* Energy pulls Europe shares higher, Asia stocks hit one-year peak
* Euro zone bond yields dip as ISM data seen pressing ECB to ease
* Dollar falls vs yen on Fed view, sterling drops on factory data
* Oil prices rise but market sceptical of output deal
By Nigel Stephenson
LONDON, Sept 7 (Reuters) - World stocks hit their highest in more than a year and the dollar fell against the yen on Wednesday as expectations of a rise in Federal Reserve interest rates receded after weak U.S. economic data.
Wall Street looked set to open flat to slightly lower, according to index futures. ESc1 1YMc1
Emerging market shares led the charge, touching their strongest levels since July 2015 as investors sought returns with interest rates likely to stay low for a prolonged period.
European shares reversed early losses. The Stoxx 600 index .STOXX edged up 0.1 percent towards eight-month highs hit on Monday, led by a rise of almost 1 percent in oil and gas shares .SXEP .
Oil prices rose even though many market participants remained doubtful producers would reach a deal to freeze output.
Banks .SX7P , for whom rock-bottom interest rates promise tough times, initially fell before turning slightly positive.
Euro zone government bond yields fell as some investors bet the weak U.S. data, which followed weaker-than-expected jobs numbers on Friday, would pressure the European Central Bank to ease monetary policy further. The ECB meets on Thursday.
"With a September rate hike looking less likely to happen, the ECB might be more pressured to come up with a decision this week on further measures," said Benjamin Schroeder, senior rates strategist at ING.
In Asia, MSCI's main Asia-Pacific stock index, excluding Japan .MIAPJ0000PUS was up 0.2 percent, having earlier touched its highest since July last year. This helped lift MSCI's all-country world index .MIWD00000PUS to its highest since August 2015.
"When people think there's no immediate rate hike from the Fed, then Asia and emerging markets are the place to go to, as investors seek yields," said Toru Nishihama, senior economist at Dai-ichi Life Research.
Japan's Nikkei index .N225 , however, retreated 0.4 percent as a strong yen hurt exporters.
DOLLAR, OIL
The dollar was last down 0.4 percent at 101.56 yen JPY= , having fallen as low as 101.18, its weakest since Aug. 16.
The dollar fell 1 percent against several major currencies on Tuesday after Institute for Supply Management data showing activity in the U.S. service sector slowed to a 6-1/2-year low in August and diminished the already slim prospects for a Fed rate hike this month. dollar index .DXY , which measures the greenback against a basket of major currencies was flat. The euro was down 0.1 percent at $1.1242.
Sterling GBP= , which topped $1.34 for the first time in seven weeks on Tuesday after the ISM data, pulled back 0.5 percent to $1.3376 after British manufacturing output fell 0.9 percent in July, its biggest drop in a year.
The data was the first to cover output solely for the period after the June 23 vote to leave the European Union.
"Sterling has been lifted in recent weeks by very strong data, but this output data shows it's been a pretty mixed bag following the referendum," said Societe Generale (PA:SOGN) currency strategist Alvin Tan.
The Swedish crown EURSEK= rose around 0.2 percent to 9.52 per euro after the Swedish central bank kept interest rates unchanged as expected. prices, which have been on a rollercoaster in recent days as expectations of whether a deal to curb a global glut can be reached have waxed and waned, edged up.
Brent crude LCOc1 , the international benchmark, gained 52 cents to $47.78 a barrel. It rose as high as $49.40 on Monday, having fallen to $45.32 on Sept. 1.
The reduced expectations of a Fed hike also lifted other commodities. Copper CMCU3 hit a two-week high at $4,688 a tonne, while gold XAU= touched a 2 1/2-week peak above $1,352 an ounce before pulling back.
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