* G7 intervenes to weaken yen, world stocks edge up
* Scepticism over intervention impact, MidEast curb gains
* Dollar spikes more than 3 percent to above 81 yen
* Oil rises on UN vote to intervene in Libya
By Emelia Sithole-Matarise
LONDON, March 18 (Reuters) - Global stocks rose and the yen
tumbled on Friday after the Group of Seven intervened to weaken
the currency and calm markets worried about Japan's nuclear
crisis, but doubts over the scope of the move blunted its
impact.
European equities pared earlier gains after China's central
bank raised lenders' required reserve ratios in a move which
also briefly reversed a rally in Brent crude prices.
Brent was last up less than $2 back just above $116 a barrel
on worries of escalating unrest in oil-rich Middle East and
North Africa after the U.N. approved military action to contain
Libya's Muammar Gaddafi.
The show of solidarity by the G7 major developed economies
to support Japan through its biggest crisis since World War Two
comes a day after the yen soared to a record 76.25 per dollar in
chaotic trading. It is the first coordinated currency
intervention by the G7 in a decade.
"The G7 intervention is calming the markets, but we still
need a few days of consolidation to think we are over the worst
of it," Giles Watts, head of equities at City Index in London,
said.
"It is just helping sentiment, and stocks sensitive to risk
will push on. But optimism is going to be guarded as there are
no firm resolutions surrounding the Japanese nuclear crisis and
the Middle East, and anything can happen on the weekend."
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The dollar was last up just over 3 percent at 81.40 yen,
retreating from a session high of around 81.98 yen <JPY=>,
following the G7 announcement, which came just as the Tokyo
stock market opened.
The euro <EURJPY=R> was last up 3.9 percent at 115.06 yen,
having jumped to a session high of 115.50 yen earlier from
around 114.70, with some traders saying the scale of
intervention was so far a fairly tame effort to stem the yen's
surge.
Some market observers said even massive official selling
might not restrain the yen for long, pointing to the Japan's
last intervention in September 2010 when it sold a huge 2.1
trillion yen, or around $25 billion worth, but only managed to
push the dollar up from 82.85 to 85.77 yen.
"It would need to be concerted and aggressive....and even
then I'm sceptical," said Richard Wiltshire, a currency trader
at ETX Capital in London.
Some market observers said the market was now focusing on
the possibility of the Federal Reserve joining in when U.S.
markets open around 1200 GMT.
MIDDLE EAST WEIGHS
Japan's Nikkei share index <> climbed 2.7 percent,
recouping some of the week's stinging losses as Japan reeled
from an earthquake, tsunami and nuclear power plant crisis.
[]
World stocks as measured by MSCI <.MIWD00000PUS> were last
up 0.3 percent, with the upward trend curbed by heightening
geopolitical tension in the Middle East.
German government bonds gained, driving yields lower with
investors wary about going into the weekend short of safe-haven
assets given escalating geopolitical tension in the Middle East
as well as the events in Japan.
Brent was less than $4 away from a 2-1/2-year high of almost
$120 reached on Feb. 24, when an uprising against Libyan leader
Muammar Gaddafi shut down at least two-thirds of Libya's oil
output.
The U.N. Security Council, meeting in emergency session on
Thursday, passed a resolution endorsing a no-fly zone to halt
government troops now around 100 km (60 miles) from Benghazi.
It also authorised "all necessary measures" -- code for
military action -- to protect civilians against Gaddafi's
forces. []
Spot gold <XAU=> rose by as much as $12.69 to $1,415.09 but
was still off a record around $1,444 hit last week on high oil
prices, fears about civil war in Libya, unrest in the Middle
East and renewed worries about sovereign debt crisis in Europe.
(Additional reporting by Anirban Nag and Joanne Frearson;
Editing by Ruth Pitchford)
