GLOBAL MARKETS-World shares, bonds steady after Fed-driven selloff
* Investors return after Thursday's sharp declines
* MSCI World index on track for worst week for 12 months
* European shares edge up, Wall Street seen higher
* Dollar steps back from two-week high
LONDON, June 21 (Reuters) - World shares, bonds and commodities steadied on Friday, a day after a sharp sell-off triggered by plans by the U.S. Federal Reserve to cut back its asset-buying programme.
Easing fears about a banking crisis in China also made for a calmer tone, with short-term money rates falling back from record highs on speculation the Chinese central bank had quietly added funds to the market.
"There have been huge moves, there have been huge repositioning, so maybe before the weekend volatility can come down a bit," Piet Lammens, a strategist at KBC said.
Emerging markets, however, remained under stress, with the prospect of the Fed's decision, prompted by signs of economic strength, sparking a migration by investors back to more advanced economies.
MSCI's benchmark index for emerging equities fell a further 0.5 percent on Friday after it lost over 4 percent in Thursday's selloff.
World stocks in general were up 0.1 percent but on track for their worst week in over a year.
In Europe, the broad FTSE Eurofirst 300 index edged up 0.1 percent in early trade, having slid 3.1 percent on Thursday, its biggest one-day fall in 19 months. A 0.5 percent rise in U.S. stock futures also hinted at a rebound on Wall Street later.
The dollar stepped back from a two-week high against a basket of developed currencies but was seen on a solid footing given the Fed's plans. It gained 0.6 percent against the yen to 97.82 yen in choppy trade.
The euro was steady at $1.3234, having backtracked from Wednesday's four-month peak of $1.3414.
In the fixed income market, German Bunds were little changed , pausing after posting their biggest daily drop since March on Thursday.