* Europe shares edge higher after Nikkei post-election gains boost Asia * Makeshift Portugal deal pushes up periphery bonds, doubts remain * Broadly softer dollar helps underpin commodity prices * Wall Street expected to open with 0.1 percent gain By Marc Jones LONDON, July 22 (Reuters) - World shares were within sight of a five-year high on Monday as a strengthening of Japanese Prime Minister Shinzo Abe's grip on power in weekend elections was seen as a boost for his radical stimulus policies. The mood was also bolstered by a pledge from the Group of 20 nations on Saturday to adjust their stimulus policies with care and put growth before austerity in order to revive the global economy, which the bloc stressed remained "too weak". A resounding victory for Abe and his LDP party with its coalition partners in Japan's Upper House elections had lifted Asian shares in a choppy session. It also saw the yen rise against the dollar and the euro although that was seen as a temporary boost as the election result is seen as negative for the yen going forward. Upbeat results from Dutch electronics giant Philips and Swiss Banks UBS and Julius Baer then helped European shares shake off a lazy start and add 0.3 percent to the 9 percent gains they have made since June. Reassurances of support from the world's major economies and some strong earnings from multinational companies have seen momentum build in equity markets over the last few weeks. The MSCI's world share index, which tracks stocks in 45 countries, was up 0.2 percent and within touching distance of the five-year high of 1,533 points it hit at the end of May. "We are seeing a bit of position adjustment today but we have got a general positive outlook and I don't think the trend is going to break," said Societe Generale strategist Kit Juckes. Abe's election victory "frees up Abe's hand to get on with the third reform arrow of his strategy, but in terms of the market there was never really any doubt over how this was going to play out." (For a story on the election result click ) CHOPPY YEN The yen bounced back after an initial dip in Tokyo trading on some dollar selling by Japanese investors, which in turn triggered stop-loss selling in thin conditions. By 1020 GMT the dollar was down 0.6 percent on the day at just under 100 yen, a turnaround from a high of 101.05. The euro was also 0.3 percent lower at 131.51, well off an early high of 132.47. Nevertheless most analysts saw it as temporary volatility. "Post the Japanese upper house election, we would expect the Abe government's economic reform rhetoric to gain further momentum, putting JPY back under pressure," Morgan Stanley's currency strategists wrote in a note. The euro was slightly up from late New York levels at $1.3181 by mid-morning, while the Australian dollar had advanced 0.3 percent to $0.9201, buoyed by Friday's move by China - Australia's single biggest export market - to ease lending rules. In Europe's debt market, benchmark Bund futures were little changed as Portugal led gains in periphery euro zone bonds after a weekend move by its President to keep the country's coalition government intact patched over its recent troubles. Market participants saw limited scope for the yields to fall much further, however, as investors fret that the fragile coalition could struggle to steer the country out of its bailout programme in 2014 as planned. "This maintenance of the status quo does nothing to address the divergences of opinion within the ruling coalition which are likely to return to the fore before too long," Rabobank strategists said in a note. COMMODITIES CREEP HIGHER Wall Street was expected to start the week on the front foot again with gains of around 0.1 percent expected at the open for both the record high S&P 500 and the Dow Jones. Commodities were mostly firmer thanks to the softer dollar. U.S. crude held near a 16-month peak of $109.32 a barrel, while copper gained 1.0 percent to $6,988 a tonne and gold hit a one-month high of $1,322.50 an ounce as it continued to recover from last month's three-year low. In emerging markets, the Turkish lira was near a one-month high ahead of an anticipated interest rate rise on Tuesday, while Hungarian stocks added to last week's steep losses on worries about government plans to change foreign currency loan rules. Turkey's central bank has been selling heavy amounts of foreign currency in recent weeks to lift the lira from record lows and most economists in a Reuters poll see a rate rise of 50-100 bps when the central bank meets on Tuesday. "The benchmark ... for the market will be 100 bps ... less than this and Turkish assets are likely to come under renewed selling pressure," said Tim Ash, emerging markets strategist at Standard Bank.