* European shares 0.8 pct higher in cautious trade
* Dollar up 1.2 pct vs yen after Nikkei rebound
* Investors welcome reaffirmed ECB, Bank of Japan support
By Richard Hubbard
LONDON, May 28 (Reuters) - European shares rose on Tuesday and German bond prices dipped as investors drew support from signals of ongoing central bank stimulus.
Investors turned cautious after the U.S. Federal Reserve cast doubt on the future of its stimulus plan last week. But both the Bank of Japan and the European Central Bank have since reaffirmed that their expansive policies will stay in place.
“I expect the major markets to test resistance levels of last week as investors are still seeking higher highs and new record levels in the near term, whilst the central banks are continuing their quantitative easing operations,” Tom Robertson, senior trader at Accendo Markets, said.
In early trading the FTSE Eurofirst 300 index of top European shares rose 0.8 percent. That followed on from a gain of 1.4 percent in Japan’s Nikkei, which tumbled 3.2 percent on Monday.
The recovery in Tokyo stocks spurred further yen selling, leaving the dollar up 1.2 percent against the Japanese currency at 101.86, off a two-week low of 100.66 yen.
German Bund futures dipped as traders made way for Dutch and Belgian debt supply later in the day. The June Bund future was 20 ticks down at 144.06 compared with 144.26 at Monday’s close.