Global shares slipped from 3-1/2 month highs on Wednesday as investors weighed up whether signs of progress in the euro zone debt crisis warranted the recent surge and as Japan provided a reminder of the problems facing top economies.
The uncertainty over Europe's debt woes have left major economies stuttering, but many big stock markets have risen 15-20 per cent since June on expectations of central bank action to address the crisis.
After falls in Asia on the back of a plunge in Japanese export numbers, top European shares were down 0.6 per cent by 0845 GMT.
London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX were all in negative territory, pulling the global MSCI index down 0.3 per cent.
Europe's battle to overcome its debt problems remains the central focus for many global investors, and the next few days will kick off a string of meetings that could go a long way in shaping the future course of the crisis.
Greek Prime Minister Antonis Samaras meets with head of the Eurogroup of euro zone finance ministers, Jean-Claude Juncker, in Athens late in the afternoon before travelling to Berlin on Friday to see German Chancellor Angela Merkel and to Paris the next day French President François Hollande.
Europe's shares are riding near 13-month highs at present, but analysts are split over whether the rise is sustainable.
"The recent rally in share prices has not at all been based on the outlook for earnings – in fact completely the opposite. It has been entirely built on hopes of large-scale ECB intervention in euro zone periphery bond markets," said Tammo Greetfeld, equity strategist at UniCredit in Munich.
"We are at the start of a multi-week period of key political events such as the Greek meetings, the ECB meeting on September 6 and the German court decision on the ESM (euro zone's permanent bailout fund) the week after."
"We think the outcome of these factors, in combination with the negative earning revisions, means the current rally will not last and that equities markets will decline," he added.
Crucial to the euro zone's hopes of climbing away from its troubles are new bond buying plans being drawn up by the ECB, which are set to be unveiled in September.
Optimism over the plans lifted the euro to a seven-week high against the dollar late on Tuesday, and it held on to much of those gains in early European trading to stand at $1.2458.
Bond markets contrasted with nervous equities, with German government bonds back in demand despite a rally by their Italian, Spanish and Portuguese counterparts.
Germany will sell €5-billion of bonds later and is again expected to pay nothing to borrow the money as the euro zone's debt worries and fears the bloc could split leave investors clambering for safe German assets.
Later in the day the U.S. Federal Reserve will publish the minutes of its most recent meeting, which will be scoured for clues on whether the central bank is gearing up for more policy aid as early as its September meeting.
Having only just hit a four-year high, Wall Street is expected to open cautiously ahead of the minutes.
Oil prices were steady at $115 a barrel, bolstered by the combination of Middle East tensions and hopes the progress in Europe could kickstart growth around the globe.
"It's going to be fascinating after the ECB meeting to see what direction the markets take; we've priced in a lot of the good news already, so I certainly don't think we'll see it rally (much), unless we get surprises on the upside," said Ben Le Brun, a Sydney-based market analyst at OptionsXpress.