RPT-GLOBAL MARKETS-Japan shares at 7-week low, dollar steady

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* Stocks stalled as Q2 earnings steer awaited

* Japan's Nikkei records biggest weekly fall since late Jan

* Market, flows data shows investors move to sidelines - EPFR

* Oil looks to build floor around $60 a barrel

By Lincoln Feast

SINGAPORE, July 10 (Reuters) - Uncertainty on earnings and economic recovery prospects kept Japanese shares hobbled near seven-week lows on Friday, while prices for commodities such as oil and copper looked to build a floor after recent declines.

European shares were set for a slightly weaker start, with a downbeat earnings outlook from oil major Chevron Corp after the Wall Street close weighing on sentiment. [.EU]

Investor caution about the earnings season also kept currency trade subdued with the yen holding below this week's five month peak versus the dollar, while the euro lost ground against both the dollar and the yen.

With the summer holidays kicking off in the northern hemisphere and the second-quarter earnings season beginning, market and fund flows suggested many investors were heading to the sidelines, fund tracker EPFR Global said.

Japan's Nikkei average <.N225> closed down just 0.04 percent, closing lower for the eighth straight session and with a weekly loss of 5.4 percent ending its worst week since late January.

"Bargain hunters are tip-toeing in after the market sank rapidly over a short period of time, with relief coming from the yen's stalled advance," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo.

"But from a broader perspective the market is still in an adjustment phase, with participants wanting to see how corporate earnings pan out first."

Japan's weak domestic demand and reliance on exports to China, the United States and Europe has this year seen the Nikkei underperform MSCI's measure of stocks elsewhere in the Asia-Pacific region <.MIAPJ0000PUS>, which edged up 0.2 percent on Friday.

The Nikkei is up a modest 4.8 percent year-to-date, compared with a 27 percent rise in the regional index and a whopping 72 percent in China's Shanghai Composite index <.SSEC>.

Stocks globally enjoyed a powerful rally in the second quarter but have run out of steam since mid-June amid concerns that any economic recovery will be slow and patchy, reigniting demand for government bonds.

U.S. Treasuries, hit by profit-taking overnight, rose in Asian trade, and the two-year Japanese government bond yield fell to its lowest level in 3-½ years on growing speculation that the Bank of Japan will extend its corporate finance support measures beyond September at its policy meeting next week.

The two-year JGB yield fell 1.5 basis points to 0.225 percent , the lowest since November 2005 after wholesale prices data showed deflation deepening in the world's second-largest economy. [ID:nT283452]

The renewed uncertainty about the global economy drove investors to the yen this week, pushing the Japanese currency to a five-month high versus the dollar.

Currency trade has been choppy since, taking its cue from equities.

"People don't know what is happening at the moment. From now on it depends on share market movement," said Jun Kato, senior chief analyst at the Shinkin Central Bank Research Institute. "People want to watch U.S. companies' performance in the second quarter."

The dollar was steady just below 93.00 yen after pulling up from a five-month low of 91.80 set on Wednesday. The euro edged down 0.6 percent to 129.6 yen after rebounding from a two-month low at 127.00 yen, also set on Wednesday.

U.S. light crude , which has fallen almost 20 percent since hitting a peak above $73 a barrel in late June, steadied above $60 a barrel, while London copper hovered around $4,900 a tonne. (Editing by Jan Dahinten)