* Dollar hits highest vs yen since July 2010, then pares * Treasuries slip but sharply pare losses * Commodities slip on greenback strength By Rodrigo Campos NEW YORK, Jan 4 World shares rose and the U.S. dollar pared gains on Friday after a payrolls report scaled back expectations of a change in U.S. monetary policy. The pace of U.S. job growth slowed slightly in December, keeping the unemployment rate steady at 7.8 percent, but details of the Labor Department's U.S. employment report also pointed to a slow but steady recovery. The stubbornly high unemployment rate was unlikely to make the Federal Reserve rethink its easy-money policies, which have been propping up the recovery. Indications that the Fed could change its easy stance on asset purchases erased gains in stocks on Thursday and pushed benchmark Treasury yields to eight-month highs. "When it comes to Fed policy, this report should keep (it)steady," said Tom Porcelli, chief U.S. economist at RBC Capital markets in New York. He said with the payrolls data "basically where it was when the Fed decided to do more quantitative easing last month," a change in policy was not in the horizon. An index of global shares was on track to post its best week in six, and its sixth week of gains in the last seven, as a last-minute budget deal in the United States and strengthening global economic data drew investors into riskier assets. The Dow Jones industrial average rose 16.55 points or 0.12 percent, to 13,407.91. The S&P 500 gained 3.54 points or 0.24 percent, to 1,462.91. The Nasdaq Composite added 0.87 points or 0.03 percent, to 3,101.43. An MSCI index of global shares rose 0.2 percent and was up nearly 3 percent for the week, making it its best since late November. The U.S. dollar pared gains versus the euro and came off a near 2-1/2 year high against the yen after the jobs data bolstered expectations the Fed will not tighten monetary policy anytime soon. The data "will if anything push out the date for an end to QE, represents solidly risk-positive numbers and will lead to some minor squeeze on recent U.S. dollar longs," said Alan Ruskin, head of G10 FX strategy at Deutsche Bank in New York. The yen has fallen in recent weeks as investors bet the new government will push the Bank of Japan to weaken the currency by implementing aggressive economic stimulus. Tentative signs that the euro zone economy may have passed the worst of its downturn also supported risk assets. Markit's Eurozone Composite PMI, which gauges business activity across thousands of the region's companies, rose in December to 47.2, from 46.5 in November - below the 50 line which divides growth from contraction but at its highest level since March last year. Benchmark U.S. Treasury yields continued their climb, but sharply cut gains after hitting a more than eight-month high of 1.9755 percent before the jobs report. The 10-year U.S. Treasury note was last down 5/32, with the yield at 1.9274 percent. Bund futures cut losses after slipping over half a point but were still adding to recent losses. They were last down 0.4 percent at 142.95. Brent crude shed 0.4 percent to $111.66 a barrel while U.S. crude was down 0.1 percent at $92.80.