(Updates at 0820 GMT)

By Huw Jones

LONDON, Aug 9 (Reuters) - Global shares firmed on

Friday, capping a rollercoaster week on a calmer footing after

U.S. jobs data eased concerns that the world's biggest economy

was headed for a hard landing.

Stocks in Japan and elsewhere in Asia gained, taking their

cue from a Wall Street bounce back on Thursday when data showed

U.S. jobless claims fell more than expected last week,

suggesting fears the employment market is unraveling were

overblown.

Figures showing that China, the world's No. 2 economy, is

taking a step back from deflation, also underpinned the better

mood after sharp falls in stock benchmarks globally earlier in

the week.

Oil prices headed for weekly gains of around 3% as

fears of a widening Middle East conflict persisted.

The MSCI All Country stock index, was up

0.3% at 784.4 points, recovering much of the ground lost during

the week.

The benchmark is 5.7% below its lifetime high of 832.35

reached on July 12, though still up 7.5% for the year.

In Europe, the STOXX index of 600 companies was up

0.7%, with the loss for the week all but erased.

In a sign of calmer nerves, the VIX index, also known

as Wall Street's 'fear gauge', was in negative territory, a far

cry from its record one-day spike on Monday.

Divergent central bank interest rate moves, a repricing of

recession probability in the United States, thinner liquidity in

August accentuating volatility, and Middle East tensions all

combined to put the brakes on a months-long winning streak in

stocks to record highs, analysts said.

"We are still in the month of August, so we can still have

some volatility," said Marie de Leyssac, portfolio manager at

Edmond de Rothschild Asset Management.

Investors will continue to study employment data, keep an

eye on the Bank of Japan, and particularly on the annual meeting

of global central bankers hosted by the Kansas City Fed in

Jackson Hole later this month, she said.

"This year I think it is a really important meeting because

we will have more insight into what (Federal Reserve Chair)

Jerome Powell sees for the future, and maybe more insight on the

path to lower rates," de Leyssac said.

Wall Street stock index futures were firmer,

with no major U.S. data expected on Friday.

NIKKEI RECOVERS

The BOJ's reassurance that it will not be hiking interest

rates amid market volatility helped sentiment recover.

Japan's Nikkei stocks benchmark closed 0.6% higher,

erasing most of the losses since a 12.4% crash on Monday.

The yen also veered from negative to positive

through the session, last trading at 147 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan

climbed 1.8%, more than reversing the drop from

Thursday. For the week, it has reversed earlier losses to be

largely flat.

Also helping sentiment is Chinese data showing that consumer

inflation ran at 0.5% in July, above forecasts of a gain of

0.3%, suggesting there is less risk of the economy sliding into

outright deflation.

"The prospect of better-than-feared U.S. growth and a weaker

yen constrain the fundamental and technical risks that inspired

the extreme volatility experienced at the start of the week,"

said Kyle Rodda, a senior financial market analyst at

Capital.com.

Some Federal Reserve officials said they were increasingly

confident that inflation is cooling enough to allow

interest-rate cuts ahead, but not because of the recent market

rout.

The U.S. dollar gained as markets gave up bets on an

emergency rate cut from the Fed, and is set for a 0.4% gain on

yen this week, despite Monday's precipitous 1.5% plunge.

Bond yields have climbed this week with safe havens in less

demand. U.S. 10-year yields held at 3.9627%, well

off Monday's low of 3.667%, and were set for a weekly gain of

about 20 basis points.

Two-year yields were trading at 4.0282%.

Brent crude futures were trading little changed at

$79.10 a barrel, but were up more than 3% for the week, while

U.S. West Texas Intermediate crude were flat at $76.11,

also up over 3% for the week.

Gold prices eased slightly to trade at $2,424 an ounce, and

heading for a drop on the week.