* Global equity markets rise after Putin speech
* Putin says Russia does not want further Ukraine split
* Fed meeting keeps volumes light
By David Gaffen
NEW YORK, March 18 (Reuters) - Major world equity markets rose on Tuesday and the safe-haven yen pared gains after President Vladimir Putin, while approving plans to make Crimea part of Russia, said he did not want to split Ukraine.
Gold, also sought in times of tension, fell and low-risk government bond yields rose.
The MSCI All-World Index of global equities rose 0.7 percent, and Wall Street was higher, building on the previous day’s gains. Volumes are expected to be low during the U.S. session in anticipation of Wednesday’s policy decision from the U.S. Federal Reserve, which begins its two-day meeting Tuesday.
Putin signed an order approving a draft treaty on “adopting the Republic of Crimea into the Russian Federation.” In a speech to a joint session of parliament, he defended a weekend referendum in Ukraine’s Crimea region in which voters overwhelmingly said they wanted to join Russia.
After Sunday’s vote, the United States and the European Union imposed sanctions on a small group of Russian and Crimean officials. However, markets’ worst fears that the referendum would lead to violence were not realised.
“What had been going on in the Ukraine has been weighing on the minds of investors for a while, so it is a relief that we are apparently moving beyond this,” said Joseph Tanious, global market strategist at J.P. Morgan Asset Management in New York.
Russia’s stock market, hammered in the run-up to the vote, rose 1.9 percent though the rouble edged down to 36.32 to the dollar.
The yen gained 0.2 percent to 101.57 to the dollar, well below peaks around 101.20 hit last week. The euro was steady at $1.3905, not far from a two-and-a-half-year high around $1.3967 touched on Thursday.
The Fed meeting is not likely to surprise. It is widely expected that the Fed - the first presided over by new chair Janet Yellen - will continue to reduce its monthly bond-buying stimulus, this time to $55 billion, as it removes the extraordinary monetary policy that kept rates low for years.
Data on Tuesday showed U.S. consumer prices rose only marginally in February, but the lack of inflation pressures was not expected to deter the Federal Reserve from further reducing its monetary stimulus.
“The Fed has to acknowledge that the transitory factors are more entrenched since inflation has run below their target for about two years,” said Michael Hanson, a senior economist at Bank of America Merrill Lynch in New York.
Policymakers could adopt less specific language to describe conditions under which it might tighten policy, instead of the bank’s current 6.5 percent unemployment rate threshold. The rate stands at 6.7 percent and has been falling rapidly, though Fed officials are still signalling that rates need to stay low to support the economy.
The FTSEurofirst 300 of top European shares gained 1 percent, reversing earlier losses, after stocks rose in Asia.
Japan’s Nikkei stock average ended up 0.9 percent, recovering from Monday’s six-week closing low.
China’s yuan fell against the dollar on China’s problems with a slowing economy and heavily indebted corporate sector. Spot yuan traded at 6.1920 to the dollar, compared with 6.1781 at Monday’s close.
German 10-year government bond yields, the euro zone benchmark, edged up to 1.577 percent. Yields on U.S. 10-year Treasuries, which rose on Monday after the U.S. data, were steady at 2.697 percent.
Spot gold traded at $1,355.33, having hit a six-month high of $1,391.76 on Monday before profit taking kicked in.
Brent crude oil rose to $106.25 a barrel as bargain hunters stepped in after prices fell more than $2 on Monday on the reduced Ukraine tensions.