* 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 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.
YUAN WEAKENS, GOLD HIGHER
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.