* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
* European stocks dip 0.2 pct, Asia shares fall
* N. Korea missile that landed in Japan's waters spooks markets
* S. Korea won drops, safe-haven yen strengthens
* Oil ends run of gains on US supply drop as traders take profits
* Risk aversion, dollar moderation boosts gold
By Marc Jones
LONDON, July 4 (Reuters) - World shares, oil and bond yields all pulled back after bright starts to the second half of the year on Tuesday, as a long-range missile test by North Korea and July 4 holidays for U.S. markets restricted risk appetite.
Asian shares had fallen and South Korea's won had hit a 16-week low after the North's missile landed in Japanese waters, while Europe was in the red as the first fall in oil prices in nine days also pushed down commodity stocks.
Traditional safety plays were working well. The Japanese yen and gold were both higher, as were European bonds helped also as Sweden's central bank sounded reassuringly cautious as it hinted at the end of its easing programme.
That took the wind out of the Swedish crown that had been the best performing global currency over the last week. The Australian dollar also took a tumble as its central bank steered clear of rate hike talk at its latest meeting.
Credit Agricole FX strategist Manuel Oliveri said the Swedish Riksbank's move showed how wary central banks remained about their currencies, while the day's other main focus was North Korea's posturing.
"North Korea is continuing to provoke," he said. Although markets were now used to these kind of events he added: "It is a bit more important as it came ahead of the G20 meeting this week."
Leaders from the Group of 20 nations are due to discuss steps to rein in Pyongyang's weapons programmes.
The dollar index against a basket of six major currencies was steady at 96.254 after rising 0.6 percent overnight as a stronger-than-expected rise in the June Institute of Supply Management (ISM) national factory activity index propelled the 10-year Treasury yield to its highest since mid May.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.6 percent as Korean tensions rose.
Japan's Nikkei surrendered earlier gains to drop 0.1 percent. South Korea's KOSPI extended losses to trade 0.6 percent lower, though Hong Kong was hardest hit as it slumped as much as 2 percent at one point.
The missile flew 930 kilometres (580 miles) before landing in Japanese water, the South Korean military and Japanese government said. North Korea state media said the missile could hit anywhere in the world.
Tokyo strongly protested what it called a clear violation of UN resolutions, and Japanese Prime Minister Shinzo Abe said he will ask the presidents of China and Russia to play more constructive roles in efforts to stop Pyongyang's arms programme.
Commodity markets also saw a shift. Crude futures posted their first session of losses in nine, ending their longest run of gains since February 2012, as traders closed positions ahead of the July 4 U.S. holiday.
U.S. crude slipped 0.5 percent to $46.85 a barrel while global benchmark Brent dropped to $49.44 as traders cashed in some of gains from a 3.7 percent leap -- its biggest one-day gain since December 2016 -- on Monday.
"We see a recovery for oil prices in H2 2017 from current levels, with OPEC production cuts, a slowdown in global supply growth and seasonally firming demand driving up prices," BMI Research said, although it added that "large-volume supply additions will keep price growth flat year-on-year in 2018".
For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
Additional reporting by Nichola Saminather; Editing by Keith Weir