* World stocks at 11-month high, emerging at 12-month
* European stocks slip, Wall Street set for weak open
* Dollar firmer but around 1 year low
By Jeremy Gaunt and Brian Gorman
LONDON, Sept 10 (Reuters) - World equities pulled back from an 11-month high on Thursday in the face of a likely weaker opening on Wall Street.
Rising inflation expectations in Europe underlined the headwinds facing the global economy as it struggles to recover, while there is also caution about the immediate future of the six-month rally in global stocks.
Emerging market stocks, however, rose further beyond pre-Lehman demise levels and Japan's index closed up nearly 2 percent.
The dollar, which has suffered from investors' improved appetite for risk, recovered to stand slightly higher against a a basket of major currencies. But it remains at depths last seen in late September 2008.
European shares turned negative in mid-morning, undermining what had been a bullish day for riskier assets.
The pan-European FTSEurofirst 300 <.FTEU3> was down half a percent, dragging MSCI'S all-country world stock index <.MIWD00000PUS> into negative territory.
"The market has retreated a bit but is looking pretty stagnant, I think it's a short term breather after the recent gains," said Philip Gillett, sales trader at IG Index.
The reverse came after the world index hit a new 2009 high, matching levels of October last year. It has risen around 65 percent since hitting a low on March 9.
The benchmark MSCI emerging market stock index <.MSCIEF>, was up 0.4 percent after reaching a new 12-month high.
Investors have become increasing willing to take on riskier assets like stocks and emerging currencies in their portfolios over the past six months as signs of economic recovery or at least a slowdown in decline have boosted sentiment.
This is making some cautious.
"One needs to recognise that markets never move in straight lines, and we are approaching October, historically the month for crashes," said John Murphy, analyst at ODL Securities.
The Bank of England left interest rates unchanged at a record low of 0.5 percent.
Long-term euro zone inflation expectations as measured by French 10-year breakeven rates hit their highest in almost a year, raising concern that loose European Central Bank monetary policy will fuel long-term price pressures.
DOLLAR WEAKER
The dollar index, which tracks its performance against a basket of six major currencies, edged up slightly after hitting its lowest level in almost a year on Wednesday.
The euro was down 0.1 percent against the dollar at $1.4540
Euro zone government bond futures earlier fell to a one-month low, extending the previous session's steep decline as stocks rose.
The two-year Schatz was yielding