* World stocks flat, Europe weighs
* Wall Street set for flat open
* Oil price falls on high U.S. inventories
* Dollar pressured by yen
By Jeremy Gaunt, European Investment Correspondent
LONDON, Aug 18 (Reuters) - World stocks were flat on
Wednesday, held back by losses in Europe that were partly caused
by energy shares taking a beating from the weaker oil price.
Wall Street looked set to open flat.
Shares of global miner BHP Billiton <BHP.AX><BLT.L> remained
in focus, falling 2 percent in London on concerns that it may
have to overpay for Canadian fertiliser group Potash Corp after
the Canadian group rejected an initial offer.
The dollar was flat against a basket of major currencies
<.DXY>, weakening particularly against the yen <JPY=> on growing
speculation that Japanese authorities are unlikely to intervene
to counter their currency's recent strong run.
Europe's FTSEurofirst 300 <> was down 0.4 percent,
dragged lower by energy stocks. The STOXX Europe 600 Oil & Gas
index <.SXEP> was down 1.1 percent.
Oil prices have been hit by worries about global economic
growth and high inventories.
An industry report signalled petroleum inventories in top
consumer the United States were headed for a record, following
an unexpected sharp increase in crude stocks last week.
U.S. crude for September delivery <CLc1> was off more than
$1 at $74.72 a barrel. It is down around 4 percent this month.
World shares as measured by MSCI <.MIWD00000PUS> and Thomson
Reuters <.TRXFLDGLPU> were up less than 0.1 percent. Japan's
Nikkei<> earlier closed up nearly 0.9 percent.
Traders warned against reading too much into market moves at
the moment given that it is high summer in the northern
hemisphere and there are major questions about the direction of
the world economy.
"The market is still rangebound. There is no conviction at
the moment, and this will go on until September when investors
come back from holiday," said Alexandre Le Drogoff, technical
analyst at Aurel BGC in Paris.
SOVEREIGN WORRY
The euro cut losses against the dollar, while sterling
rebounded as investors reversed short positions after the
release of minutes from the Bank of England's last policy
meeting.
"Dollar/yen is headed towards the 85 yen level and there is
little that can be done to prevent that," said Kenneth Broux,
markets strategist at Lloyds TSB Financial Markets. "There is
talk the Japanese won't intervene as yet, and of course Japanese
yields are still positive."
The dollar shed 0.3 percent against the yen to 85.29 yen
<JPY=>, not far from a 15-year low of 84.72 yen hit on trading
platform EBS last week.
The euro was down 0.05 percent at $1.2872 <EUR=>.
Longer-dated German bonds rallied after Berlin drew strong
demand at a 5 billion euro sale of new 10-year paper at a record
low average yield.
(Additional reporting by Blaise Robinson and Anirban Nag;
editing by Stephen Nisbet)
