Global markets trade within tight ranges, eyes on central banks

A share trader uses his phone during the morning trading session at the stock exchange in Frankfurt October 12, 2011.

LONDON (Reuters) - Weak growth numbers from Asia sent the dollar to a two-month low against the yen on Wednesday but most markets traded within tight ranges awaiting the verdict from policy making meetings of the U.S. Federal Reserve and the European Central bank.

The greenback's fall against the Japanese currency to A low of 77.90 yen came after China's official factory purchasing managers' index fell to an eight-month low of 50.1 in July, suggesting virtually no growth.

The data underscored that the world's second-biggest economy is losing momentum, and followed signs of decelerating growth from other major Asian exporters including Japan, South Korea and Taiwan.

European PMI data for July due out later is likely to add to the picture of gloom about the global growth outlook.

However, despite the weaker data most analysts still only expect the Federal Reserve to signal its readiness to act in future at the conclusion of its two-day meeting later today while divisions among European leaders could stall any action from the ECB on Thursday.

"As a result of the uncertainty and potential savage market reaction, caution is likely to persist until investors have the benefit of these crucial central bank decisions," IG Markets said in a note.

A string of better corporate results helped lift European shares ahead of the ECB meeting with the FTSE Eurofirst 300 index of top European shares rising 0.15 percent to 1064.88 points. The index posted a solid 4.1 percent gain for July, its second-best monthly gain of the year.

The single currency gained just 0.1 percent against the dollar to $1.2320, below its three-week high of $1.2390 hit last week.

(Reporting by Richard Hubbard; Editing by Anna Willard)