* Shares extend losses as markets brace for Fed minutes
* Indian rupee hits record low, Indonesian rupiah slides
* Dollar recovers from 6-month low vs euro
* Tokyo stocks recoup losses, Japan raises radiation alert
By Richard Hubbard
LONDON, Aug 21 (Reuters) - World shares hovered near six-week lows on Wednesday and vulnerable emerging market currencies extended losses as investors looked to a U.S. Federal Reserve report expected to signal a cutback in its stimulus policy.
Wall Street was set to open slightly lower as well with investors highly cautious about trading ahead of the release of the minutes of the Fed's July meeting, due at 1800 GMT.
Markets have been grappling with the prospect of an early end to the Fed's ultra-loose monetary policy ever since chairman Ben Bernanke said in June that the central bank expected to taper its monthly $85 billion bond buying programme this year.
A widely held conviction that Wednesday's minutes will hint at a policy shift next month continued to hit the Indian rupee, Indonesian rupiah and Turkish lira - despite supportive words and actions from the countries' central banks.
"I don't think we're going to get that clear signal as to whether September is when they pull the trigger on tapering, but that is what the markets are hoping for," said Daragh Maher, FX strategist at HSBC.
The rupee fell to a record low of 64.52 per dollar, the rupiah looked set to break the key 11,000 per dollar level and the lira plumbed an all-time low, drawing no support from a rate hike on Tuesday.
Large current account deficits make all three countries particularly vulnerable to capital outflows at times of monetary tightening.
Equities have also been caught up in the emerging markets' selloff, victims of a growing conviction among investors that an end to Fed bond buying due to the stronger U.S. economic outlook makes developed debt and stock markets a sounder bet.
MSCI's emerging equity index fell 0.5 percent to a six-week low, having lost more than 2 percent this month, though it remains above the June lows set when the Fed first announced the likelihood of a policy shift.
The MSCI world equity index, which tracks developed and emerging markets, was down around 0.25 percent to levels last seen in early July.
Europe's broad FTSE Eurofirst 300 index and Britain's benchmark equity index both tracked the falls in global equity markets lower.
However, in Japan the Nikkei ended up 0.2 percent as investors drew support from a declaration by Bank of Japan Governor Haruhiko Kuroda that he would not hesitate to expand the bank's massive asset-buying campaign if the economic outlook darkened.
That gain came despite plans by Japan's government to raise the severity of the latest leak at Fukushima to a level 3 event, or a serious radiation incident, a move which sent shivers through Asian markets and drew a shocked reaction from China.
Among the major currencies - where safe-haven flows ahead of the Fed minutes have favoured the yen and Swiss franc - the dollar had recovered some lost ground, gaining 0.2 percent against a basket of currencies to be off a two-month low.
The euro eased 0.2 percent against the dollar to $1.3390 , having touched a six-month high of $1.3452 on Tuesday, and sterling hit a two-month high of $1.5697 against the dollar when a business survey showed an improvement in UK factory orders.
Developed world fixed income markets were trapped in narrow ranges, while emerging market bonds reflected the weakness in their underlying currencies. Turkish 10-year bonds were trading at 9.3 percent up from 6.0 percent three months ago before the tapering talk began.
Benchmark 10-year Treasury yields edged back to 2.82 percent though rates remained close to 2013 highs as many investors have already positioned for the potential Fed tapering.
German bond yields were also little changed, having hit their highest since March 2012 on Monday.
"We do not expect much new guidance from the minutes so the risk is that we see a bit lower yields in U.S. Treasuries and Bunds," said DZ Bank strategist Christian Lenk.
Commodity markets were generally softer. Copper futures dipped 0.6 percent to $7,376 a tonne, while spot gold fell 0.4 percent to around $1,365 an ounce, still not far from a two-month high set on Monday.
Brent crude prices eased 45 cents to $109.70 a barrel, while U.S. oil for October delivery lost 55 cents to $104.56.