World equities climbed higher on Friday, although investors were cautious about U.S. jobs data due later in the day, while the dollar slipped against a basket of major currencies.

MSCI's all-country world stock index <.MIWD00000PUS> was up about 0.4 percent, but still looked set to end the week lower. If it does, it will be the first loss eight weeks and only the fifth since the March rally began.

Some investors have begun to pull back from equity markets, expecting a correction after so many months of gains. Fund tracker EPFR Global said, for example, that flows into equity funds stalled in the latest week.

But other remain bullish. Both UBS and Goldman Sachs said they were raising their year-end targets for European stocks.

The FTSEurofirst 300 <.FTEU3> index of top European shares was up 0.9 percent. It is up 48 percent since a record low in March, but is still down about 17 percent from a year ago, just before the collapse of Lehman Brothers that accelerated the global credit crisis.

A poor week is in desperate need of a good finish. Having enjoyed a stellar run over the past few weeks, it is now a test of nerve for the market bulls, said John Murphy, analyst at ODL Securities.

Earlier, Japan's Nikkei <.N225> lost 0.27 percent.

The G20 was meeting in London, where finance ministers were expected to discuss the continuing role of governments in combating global economic decline.

But the key event for most financial markets, however, was the U.S. Labor Department's release of August payrolls data at 1230 GMT. Economists in a Reuters poll forecast 225,000 jobs were shed by the world's biggest economy, down from the 247,000 job losses in July.


The dollar was generally lower, although it managed to hold above a seven-week low hit earlier in the week against the yen.

The euro was up 0.2 percent at $1.4275 and the dollar gained 0.1 percent against the yen to 92.72 yen.

Payrolls could have a definitive impact, said David Watt, senior currency strategist at RBC Capital Markets in Australia.

Preliminary indicators, however, are on balance consistent with the consensus. Hence, anything could be a surprise and the dollar could be in for a jolt either way.

A weaker-than-expected report could feed risk aversion, boost Treasuries and so aid the greenback.

On euro zone government debt markets, the interest rate-sensitive two-year Schatz yield was 1.162 percent. Earlier, it marked a fresh six-month low of 1.139 percent.

(Additional reporting by Atul Prakash and Charlotte Cooper; Editing by Andy Bruce)