* European shares rise, reversing earlier losses
* Putin says Russia does not want further Ukraine split
* Yen gains vs dollar but below recent peak; gold falls
* Fed meeting also keeps investors cautious
By Nigel Stephenson
LONDON, March 18 (Reuters) - European shares rose on Tuesday and the safe-haven yen pared gains after President Vladimir Putin, while approving plans to make Crimea part of Russia, said his country did not want Ukraine to split further.
Gold, also sought in times of tension, fell and low-risk government bond yields rose.
The FTSEurofirst 300 of top European shares gained nearly 0.5 percent, reversing earlier losses, after stocks rose in Asia. U.S. stock futures also rose, indicating a firmer start on Wall Street.
“He (Putin) is very gracious in his victory ... and the words about respecting Kiev and the Ukraine are what the eurocrats and the markets in general want to hear,” said John Woolfitt, head of trading at Galvan.
Earlier, 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.
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.
MSCI’s broadest index of Asia-Pacific shares outside Japan added about 0.3 percent. Japan’s Nikkei stock average ended up 0.9 percent, recovering from Monday’s six-week closing low.
A two-day policy meeting of the U.S. Federal Reserve, due to start later on Tuesday, also kept investors nervous.
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.
Policymakers could adopt less specific language to describe conditions under which it might tighten policy, instead of the bank’s current threshold of a 6.5 percent unemployment rate. The rate stands at 6.7 percent, though Fed officials are still signalling that rates need to stay low to support the economy.
The yen gained 0.12 percent to 101.63 to the dollar, well below peaks around 101.20 hit last week. The euro was steady at $1.3905, not far from a 2 1/2-year high around $1.3967 touched on Thursday.
“We’ve seen some easing off of the relief rally we saw yesterday but it (Ukraine) is going to stay at the top of the market’s list of concerns,” said Lee Hardman, currency strategist with Bank of Tokyo Mitsubishi-UFJ in London.
China’s yuan fell against the dollar on China’s problems with a slowing economy and heavily indebted corporate sector. Spot yuan traded at 6.1810 to the dollar, compared with 6.1781 at Monday’s close.
German 10-year government bond yields, the euro zone benchmark, edged up. Yields on U.S. 10-year Treasuries , which rose on Monday after the U.S. data, steadied after earlier falls.
Spot gold traded at $1,357.30, having hit a six-month high of $1,391.76 on Monday before profit taking kicked in.
Brent crude oil rose above $106 a barrel as bargain hunters stepped in after prices fell more than $2 on Monday on the reduced Ukraine tensions.