* European shares dip in jittery trade before Fed statement * Dollar steadies against major currencies, weaker vs yen * Oil holds around $106 a barrel, gold flat * German Bunds firm as debt auction eyed By Richard Hubbard LONDON, June 19 (Reuters) - European shares turned lower but major currencies and commodities stuck within recent ranges on Wednesday as investors awaited clarity on the U.S. Federal Reserve's next policy move. Mixed reports on the strength of the U.S. economic recovery are expected to encourage the Fed to leave its ultra-loose policy unchanged, but concern it may hint at when it will wind back its bond buying is making all markets skittish. "The market is very nervous," said Oliver Roth, head trader at Close Brothers Seydler. "For investors, I would say that they should be careful and set their limits - especially stop limits - very carefully, because if there is some change coming up for the Fed policy then there could be a dramatic drop for the market," he said. The policy setting Federal Open Market Committee will announce its decision at 1800 GMT, followed 30 minutes later by a news conference with Fed Chairman Ben Bernanke. Expectations for a scaling back of the Fed's massive bond buying programme has supported the dollar, especially against emerging market currencies, though uncertainty over the impact of any policy shift has led some investors to prefer the yen. It shed 0.4 percent to under 95 yen on Wednesday, although the dollar was steady against the euro at around $1.34 after the single currency touched a four-month high on Tuesday. Against a basket of major currencies the greenback was flat at around 80.50. "The general elements for a stronger dollar are in place, on the back of the prospect of tighter U.S. monetary policies. Maybe it will get another shot in the arm (from the Fed), may be it won't, but rushing to judgement is probably going to be a mistake," said Ned Rumpeltin, head of G10 FX strategy at Standard Chartered Bank. SHARES EXPOSED Trading was choppier in equity markets as investors have seen strong gains this year on the back of the liquidity injections from major central banks. Europe's broad FTSEurofirst 300 index gave up earlier gains to dip 0.25 percent, tracking a softer session in Asia outside Japan, where mainland Chinese stocks were hit by dampened hopes for a local policy easing. "The Fed's tone will clearly influence the action. If Bernanke indicates that tapering is quite a bit of a distance off, investors will feel relieved and equities can revisit their recent highs," Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, said. Japanese stocks bucked the softer trend in Asia, closing up 1.8 percent to reach a one-week high as data showed Japan's exports rose in May at their fastest annual rate in more than two years. The MSCI world equity index, tracking shares in 45 countries, added 0.15 percent to bring its gains this week to 1.2 percent, but with activity expected to be limited ahead of the Fed statement. Bund futures were also little changed ahead of the Fed and a sale of 5 billion euros of new 10-year German bonds later in the session. Ten-year German bonds yielded 1.55 percent, up around 40 basis points since the beginning of May, mirroring a rise of about 50 bps in equivalent U.S. Treasury yields over the same period. In cautious commodity markets, growth-linked metals like copper, as well as safe-haven and inflation-linked assets such as gold, were restricted to minor moves. Three-month copper on the London Metal Exchange CMCU3 rose 0.1 percent to $7,013.25 a tonne, but this was not far off its lowest price since early May. "Base metals have been struggling as portfolio managers and investors have been cutting their exposure to commodities," said Victor Thianpiriya, commodities strategist at ANZ Bank. Brent crude held above $106 a barrel, near an 11-week high, as hopes for ongoing Fed stimulus underpinned prices. U.S. crude for July delivery touched a nine-month high of $99.01, before easing to $98.81, still up 37 cents.