* World stocks rise for fourth day
* Nikkei rises 4.4 pct as markets return from holiday
* Expected ECB rate hike propels euro higher
* Investors eye Libya, Japan
(Updates prices, adds byline, New York to dateline)
By Rodrigo Campos and Pratima Desai
NEW YORK/LONDON, March 22 (Reuters) - A jump in Japanese shares buoyed global equities on Tuesday while the U.S. dollar tumbled to 15-month lows against the index of major currencies and was expected to weaken further.
The benchmark Nikkei average <.N225> jumped 4.4 percent as traders in Tokyo returned from a national holiday to recoup some of last week's losses of more than 10 percent.
The MSCI global stocks index <.MIWD00000PUS> was up 0.4 percent but the FTSEurofirst 300 <.FTEU3> index of top European shares edged up less than 0.1 percent after surging 1.8 percent in the previous session. [.EU]
The euro rose to its highest in four and a half months against the U.S. dollar on expectations the European Central Bank may raise interest rates to address inflation.
Uncertainty stemming from oil-producing northern Africa and the Middle East, as well as concern about Japan's economy after the natural disasters and nuclear crisis have kept investors on edge in the past days.
U.S. stocks opened little changed though as a three day rally appeared to run out of steam in light of global uncertainty.
"There is a lot of volatility and a lot of uncertainties surrounding Japan and Libya," said Tim Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills, New York.
"Neither one of the situations looks quite ready to settle down yet and that could drag out for some time and weigh on the market."
The Dow Jones industrial average <.DJI> was down 5.83
points, or 0.05 percent, at 12,030.70. The Standard & Poor's
500 <.SPX> dipped 1.79 points, or 0.14 percent, at 1,296.59.
The Nasdaq Composite <.IXIC> fell 2.72 points, or 0.10 percent,
at 2,689.37.
Dollar index weekly trendline: http://r.reuters.com/jum68r
Graphic on intervention:
Earthquake in graphics http://r.reuters.com/fyh58r
US DOLLAR TUMBLES
In currency markets the euro
The dollar fell to a 15-month low against the Intercontinental Exchange's index major currencies <.DXY>. Sterling was the biggest gainer after a rise in UK inflation increased the chances of an interest rate hike sooner rather than later.
"Euro/dollar is supported after (ECB President Jean-Claude) Trichet continued to signal a rate hike in April," said Mic Ingenuus, currency strategist at Nordea in Copenhagen.
Oil prices ticked lower, with Brent trading below $115 on an anticipated slowdown in Western air strikes on Libya following three nights of bombings.
U.S. President Barack Obama, wary of getting sucked into a Libyan civil war, said the United States will cede control of the air assault in days. [nLDE72L00C] and [ID:nTOPMEAST].
Brent crude for May
"Short-term, we suspect that the crude oil market is somewhat overextended here, as the fighting in Libya will lose its ability to spark the market higher," said Edward Meir, senior commodities analyst at MF Global.
"For all practical purposes, investors have reconciled themselves with the fact not much oil will be flowing out of Libya any time soon." (Additional reporting by Angela Moon, Jeremy Gaunt, Jessica Mortimer, Rujun Shen, Joanne Frearson, Nia Williams and Alejandro Barbajosa;)