Government bonds struggled for direction on Wednesday and European shares fell as investors tempered their economic optimism ahead of key U.S. data and eyed oil's renewed flirtation with record highs, Reuters reported. But shares in Japan kept up their buoyant form as foreign investors ignored the country's huge dependence on fuel imports and again bought financial shares, lifting the Nikkei average above 12,500 for the first time in four years. Data showing a near-five percent year-on-year jump in eurozone industrial orders was seen raising the risk of an eventual European Central Bank interest rate hike after data on Tuesday showed German investor confidence at a 17-month high. That augured well for Thursday's Ifo German business confidence index, but largely failed to move shares or bonds as economists put the data in perspective. "(The ECB) still have to maintain an accommodative policy for a considerable period, well into next year, before they can start thinking about hiking again, because the general picture is still of benign inflation risk and lacklustre demand," economist David Brown of Bear Stearns said. The dollar rose to around 110.60 yen and $1.2195 versus the euro but traded within tight ranges as investors looked to speeches from Federal Reserve policymakers and U.S. durable goods data at 1230 GMT for clues on the U.S. interest rate outlook. Economists on average forecast a 1.2 percent drop in durable goods orders in July, after three months of gains, and Chicago Fed President Michael Moskow is scheduled to make a speech at 2200 GMT. U.S. central bank chief Alan Greenspan is also down to speak on Friday and the U.S. data reaches a monthly climax next Friday with the release of the all-important U.S. jobs report -- something already preying on investors' minds, strategists said. --mor 1408 Local Time 1108 GMT
