(Updates throughout; refreshes prices at 0920 GMT)

By Tom Westbrook and Amanda Cooper

LONDON/SINGAPORE, March 26 (Reuters) - Global shares

struggled for traction on Tuesday as mixed messages from U.S.

policymakers and a wobble in the Chinese yuan left traders

unsettled and tentative ahead of Friday's release of U.S.

inflation data.

The risk of Japan intervening to prevent further falls in

the yen squeezed the dollar. However, it rose against the yuan

on speculation that China may tolerate a weaker currency.

The MSCI All-World index was barely changed

on the day, as Europe got off to a weak start and sentiment in

China and Hong Kong remained fragile after Friday's sudden slide

in the yuan. S&P 500 futures rose 0.3%.

In the spotlight was the yen, which has been

trading close to its weakest against the dollar since 1990, even

after the Bank of Japan raised interest rates for the first time

in 17 years last week.

The 14% decline in the yen's value over the last 12 months

fed a surge in Tokyo's Nikkei index to record highs this

month, but stirred concern among Japanese officials that the

recent depreciation is problematic.

"FX was the wallflower for most of Q1, when we had record

highs for stocks," XTB research director Kathleen Brooks said.

"We've got changing sands in the FX market. You've got

threat of intervention from Japan ... and from China. It's good

to see that they do actually care about the economy and they are

wiling to step in. It's not quite the stimulus we want, but they

are saying 'enough is enough now, we do need to worry about our

deflation'," she said.

The yen strengthened a touch on Tuesday, leaving

the dollar down 0.1% at 151.25.

Monday's rhetoric from Japan's top currency diplomat, Masato

Kanda, kept the yen steady as traders weighed the risk of Japan

buying heavily. Kanda said the yen's recent slide was "strange"

and "speculative".

Meanwhile, yuan, which the Chinese central bank

fixed at a firmer level earlier in the day, also gained ground

on the dollar, which fell 0.1% in the offshore market to 7.2464

.

Markets have been unsettled since Friday's sharp drop in the

yuan after months of tight trading, and some speculate China is

loosening its grip on the currency to allow it to fall.

"Whether this reflects a shift in FX policy remains to be

seen but accommodative monetary conditions are necessary in the

face of growth headwinds," said BofA Securities' strategist

Adarsh Sinha.

"If (yuan) depreciation sustains and coincides with a weaker

credit impulse, Asia FX is vulnerable."

MIXED OUTLOOKS

On Monday, a mixed outlook from Federal Reserve officials

threw a few wild cards into the policy outlook while markets

wait on the next U.S. inflation indicators due on Good Friday.

Chicago Fed President Austan Goolsbee said he had pencilled

in three rate cuts this year, while Fed Governor Lisa Cook urged

caution and Atlanta Fed President Raphael Bostic reiterated

Friday remarks trimming his expectations to one cut.

"Comments by FOMC participants suggest to us that four

voters - Bostic, Bowman, Mester, and Barkin - see zero, one or

two cuts this year," said Standard Chartered strategist Steve

Englander.

"We still think (chairman Jerome) Powell has eight votes for

easing, but he probably does not want an 8-4 vote on the first

cut of the cycle. Rather, he may hope that good inflation

outcomes will allow him to swing a couple of votes into the

cutting camp in the coming months."

U.S. interest rate futures price about three Fed rate cuts

this year and about a three-in-four chance of the first cut in

June.

U.S. two-year yields, which track short-term

interest rate expectations, held steady at 4.589% in Europe.

Later on Tuesday, U.S. manufacturing, services and consumer

confidence figures are due. U.S. core PCE data is due on Friday.

Gold and oil prices were broadly steady in commodities

trade, with spot gold up 0.5% at $2,181 an ounce, while

Brent crude futures rose 0.2% to $86.86.

Bitcoin hovered just above $70,000 after rising

sharply on Monday.

(Editing by Lincoln Feast and Bernadette Baum)