* World stocks rise for fourth consecutive day
* European shares up 0.3 percent, Japan gains 1.6 percent
* Currency, bond markets cautious before U.S. jobs data
By Jeremy Gaunt, European Investment Correspondent
LONDON, Feb 6 (Reuters) - World stocks rose for the fourth straight day on Friday as expectations grew that Washington will make new moves to shore up the battered financial system, while the dollar slipped before key U.S. jobs data.
The U.S. Senate was due to resume debate on a $900 billion stimulus plan later in the day, after abruptly calling a halt to a drive to forge a bipartisan agreement on Thursday night.
U.S. President Barack Obama urged action on the bill to stave off "catastrophe".
The combination of actions by governments to pump up economies and shore up the financial system has begin to build some confidence among investors.
MSCI's all-country world equity index was up 0.3 percent, its fourth gain in as many days and its seventh in the past 10. It is still trading in a fairly narrow range, however.
The index's emerging market counterpart has been far more bullish. It was up 2.3 percent on Friday.
"There are creeping expectations the policy efforts can succeed," said Bernard McAlinden, strategist at NCB Stockbrokers in Dublin.
The FTSEurofirst 300 index of leading European shares was up 0.3 percent. Earlier, Japan's Nikkei closed up 1.6 percent for its second consecutive week of gains.
"Expectations for fresh developments with U.S. economic measures next week, including the establishment of a 'bad bank', and a weaker yen are encouraging investors to pick up stocks," said Fumiyuki Nakanishi, manager at SMBC Friend Securities.
Equity gains were capped by caution ahead of U.S. jobs data due later. Market watchers said the slight improvement in sentiment towards the U.S. economy, which had helped underpin stocks, could be dampened again if the numbers point to a worse-than-expected deterioration in the job market.
U.S. non-farm payrolls as expected to show a loss of 525,000 jobs in January following 524,000 jobs lost the previous month, a Reuters poll showed.
JOBS DATA WEIGH
On foreign exchange markets, the yen held a steady tone against the dollar and euro as trade was subdued ahead of the jobs data.
"In recent days, negative U.S. data has been positive for the dollar with bad economic news weighing on equity markets and a 'safe-haven' bid being created for the dollar in turn," said David Powell, currency strategist at Bank of America.
"However, the more straightforward reaction in the forex markets from a bad reading is likely to be a yen rally."
The dollar was flat at 91.17 yen after climbing above 92 yen on Thursday. The euro was at 116.65 yen.
The euro was little changed against the dollar at $1.2791 after the European Central Bank kept interest rates unchanged on Thursday but indicated more easing next month, as widely expected.
Euro zone government bond prices were mixed. Two-year yields were down 2 basis points at 1.401 percent, off a two-week low of 1.38 percent struck on Thursday. The 10-year Bund yield was flat at 3.322 percent.
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(Additional reporting by Natsuko Waki, Brian Gorman and Tamawa Desai; editing by Stephen Nisbet)