By Sujata Rao
LONDON (Reuters) - British equities surged to one-year highs on Friday, lifted by the Bank of England's new stimulus plan, while sterling clambered off one-week lows and the dollar slipped as currency markets positioned for U.S. jobs data.
Other share markets also rose and, before the 1230 GMT non-farm payrolls numbers that a Reuters poll predicted would show the world's biggest economy added 180,000 jobs last month, U.S. futures pointed to a slightly firmer opening on Wall Street.
Coming a week after surprisingly tepid U.S. second-quarter growth numbers, the data will be scrutinised by markets trying to gauge the likely timing of the next U.S. rate rise.
The dollar, which fell 2 percent last week and slipped almost 0.2 against a basket of currencies on Friday, could get a boost from a strong jobs reading.
Global stocks stayed firmly on the front foot after the BOE re-joined the stimulus party on Thursday.
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Acting on its chief economist's wish to use "a sledgehammer to crack a nut", the BoE cut interest rates to next to nothing and unleashed billions of pounds of quantitative easing (QE) stimulus to cushion against the impact of Britain's vote to leave the European Union.
The UK's main FTSE 100 index rose to its highest level since July 2015, adding to Thursday's 1.6 percent surge.
MSCI's world equity index rose for a second day, while emerging equities jumped 1 percent, approaching one-year highs..
The pan-European STOXX600 index was up 0.4 percent.
"(Markets) are infatuated with QE. We are all buying ...purely on the fact that more money is going to flood into markets, depressing bond yields and increasing the value of risk assets such as equities," said Peter Lowman, chief investment officer at wealth manager Investment Quorum in London.
Stock futures for the Dow Jones, S&P500 and Nasdaq indexes were up a quarter percent each.
Earlier, MSCI's index of Asia-Pacific shares outside Japan rose 1.1 percent, heading for a 0.8 percent weekly gain.
But Japan's Nikkei surrendered earlier gains to close flat. It fell 1.9 percent in a week marked by investor disappointment over the new stimulus measures announced by the country's central bank and government.
'BUYING CENTRAL BANKS'
Share markets gained despite warnings from BoE governor Mark Carney of a further likely downturn in the UK economy, and despite relatively weak corporate earnings and subdued economic growth indicators in most parts of the world.
Britain's Royal Bank of Scotland reported widening first-half losses, sending its shares down 4.5 percent.
German data on Friday showed an unexpected fall in June industrial orders, and oil prices stumbled again, falling 1 percent on fresh signs of weakening demand from China.
"It's obvious the world is now buying central banks rather than the fundamentals attached to the economies," Lowman said.
The BOE move pushed sterling 1.6 percent lower against the dollar on Thursday. The pound climbed 0.4 percent on Friday and stands around 2.7 percent off the three-decade lows hit in the days after the Brexit vote.
British government bond yields also inched off record lows, and German yields rose after a 5 basis-point tumble following the BOE move.
The U.S Federal Reserve is now the only central bank in the developed world that is on a path to tighter monetary policy - mainland Europe, Japan and Australia are all trying to prop up growth and inflation with a looser approach.
Christian Lenk, a strategist at DZ Bank in Frankfurt expects the payrolls number to be roughly in line with this year's average of 171,500 job adds a month.
But he added: "Even this figure is unlikely to entirely convince the (Fed's) FOMC of the necessity of another rate hike, especially in light of last week's weak U.S. GDP."
The U.S. central bank hiked rates in December for the first time in nearly a decade but has held them steady since. Money markets are priced just a 30 percent chance of another rise by year-end, according to CME's FedWatch tool.
(Additional reporting by John Geddie in London; Nichola Saminather in Singapore and Shinichi Saoshiro in Tokyo; Editing by Hugh Lawson)