* U.S., Europe stocks dip; global shares buoyed by Japan
* Euro retreats from 4-1/2-month high versus dollar
* Nikkei futures dip after three days of gains
* U.S. crude up 2 pct as unrest escalates in Yemen
(Recasts; updates prices)
By Rodrigo Campos
NEW YORK, March 22 (Reuters) - U.S. crude prices jumped on Tuesday as unrest in Yemen raised concerns about a further threat to supply from the Gulf area with Libya's flow also crippled by a standoff between rebels and the government.
The U.S. dollar was unchanged near 15-month lows versus a basket of currencies, further supporting oil prices which reversed an earlier drop.
Adding to days of unrest in Libya, investors fretted as thousands of Yemeni protesters took to the streets clamoring for President Ali Abdullah Saleh to step down. Several top officials have already abandoned Saleh, who warned his country would descend into civil war if he were forced to quit. For details see [ID:nLDE72L03D].
"The situation in the Middle East is still very bullish for oil," said Phil Flynn, analyst at PFGBEST Research in Chicago. "The unrest spreading (there) on top of the conflict in Libya is still the market focus."
Volatility eased in other markets as uncertainty over fighting in Libya, unrest in Yemen and Japan's earthquake aftermath kept both stocks and U.S. government debt in a narrow range. Europe's main equity benchmark <.FTEU3> closed 0.06 percent lower after hitting a one-week high on Monday.
U.S. stocks slipped but the MSCI global stocks index <.MIWD00000PUS> was up 0.3 percent, buoyed by an overnight rise in Japanese stocks.
Tokyo's Nikkei average <.N225> added 4.4 percent as traders
returned from a national holiday, but U.S. dollar-denominated
Nikkei futures
"There's a relative calmness in markets as investors plot their next moves, even though we're flying through fog with all the issues that remain uncertain," said Jeffrey Davis, chief investment officer at Lee Munder Capital Group in Boston.
Trading volumes remained subdued in Wall Street.
The Dow Jones industrial average <.DJI> dipped 19.72 points, or 0.16 percent, to 12,016.81. The Standard & Poor's 500 <.SPX> lost 4.44 points, or 0.34 percent, to 1,293.94. The Nasdaq Composite <.IXIC> fell 9.07 points, or 0.34 percent, to 2,683.02.
The CBOE volatility index <.VIX> edged 1.6 percent lower to
20.28 after a near 16 percent drop on Monday.
U.S. trading volume slowdown http://r.reuters.com/gyp68r
Japan earthquake in graphics http://r.reuters.com/fyh58r
EURO RETREATS, CRUDE REVERSES LOSSES
In currency markets the euro
Still, expectations that the European Central Bank will hike interest rates next month could limit any downside for the common currency.
"This, to me, is just a technical pullback," said Joseph Trevisani, chief market analyst at FX Solutions in Saddle River, New Jersey.
The dollar also had hit a a 15-month low against other major currencies <.DXY> but later ticked up.
Reversing earlier losses, U.S. crude
U.S. Treasuries were little changed in low volume as
investors looked for further progress in Japan and the Middle
East. Benchmark 10-year notes
China's rare earth metal export prices were up almost ninefold from a year before in February according to Reuters calculations based on data from China's Customs office. [ID:nTOE72L01E].
The hike in export values has coincided with a collapse in volumes coming out of China, the source of almost all the world's rare earth supplies. The country has cut export quotas and raised tariffs on exports, infuriating trading partners.
Shares in U.S. miner Molycorp
(Additional reporting by Ryan Vlastelica, Karen Brettell, Wanfeng Zhou, Joshua Schneyer and Tom Miles; Editing by Andrew Hay)