World shares were steady near all-time highs and the dollar and benchmark US Treasuries and Bunds firmed on Thursday, as the head of the Federal Reserve left markets assessing how to handle the inevitable phasing out of its support.
The yen was under pressure in the currency markets as focus switched to Japanese weekend elections that are expected to strengthen the hand of Prime Minister Shinzo Abe and his radical economic stimulus policies.
Markets are also watching a meeting in Moscow of G20 finance ministers for signs of an orchestrated approach to the end of US money-printing, which could help defuse volatility in global markets.
The G20, which meets on Friday and Saturday, includes many of the developing countries that have been at the sharp end of the dollar's surge since Bernanke first signalled the fed would roll back its bond buying in May.
By mid-morning in Europe, the dollar index was up 0.1 percent but starting to sag following overnight gains made after Fed chief Ben Bernanke on Wednesday stuck to a timeline to wind down its $85 billion a month bond-buying programme.
Bernanke went out of his way to stress that the cautious withdrawal would depend on economic conditions, comments that helped comfort asset markets.
The broad FTSEurofirst 300 share index had recovered from a soft start to the day to be up 0.2 percent by 0930 GMT as it consolidated the 8 percent gains it and MSCI's world index have made over the last month.
Mouhammed Choukeir, Chief Investment Officer of fund manager Kleinwort Benson, said that while Bernanke's comments would help markets for now, investors would remain extremely edgy about the inevitable withdrawal end of uber-easy monetary policy.
"QE (quantitative easing) is here to stay a little longer, but it has to stop one day. The volatility in the past few weeks has perhaps been a glimpse of what is to come," Choukeir said.
"Where a QE world is a world in which risk assets (equities) go up and safe havens (government bonds and gold) also go up, it would appear that a new post-QE