World stocks slipped from a three-week peak on Thursday while the low-yielding yen rose after the Federal Reserve suggested additional measures may be needed to combat a weakening economy.

Minutes of the Fed's June meeting showed officials were concerned with the pace of the economic recovery and felt they should be ready to consider additional steps if an already softening outlook took a noticeable turn for the worse.

Chinese data also injected caution. The country's economic growth moderated to 10.3 per cent in the second quarter from 11.9 per cent in the first quarter, slightly below forecasts of 10.5 per cent growth.

Investors took profits on risky assets after a recent rally driven by strong US quarterly earnings. US banking giant JPMorgan is among the companies reporting results later on Thursday.

'On one hand, we have very strong company results. On the other hand, we have lingering doubts about the pace of the economic recovery,' said Luc Van Hecka, chief economist at KBC Securities.

'If you take into account what the underlying growth pace is in the US economy, if you take inventory affects and if you take economic stimulus packages, then it turns out that the economy is growing at a pace which is close to zero.'

MSCI world equity index fell a third of a percent after hitting the three-week peak on Wednesday.

The Thomson Reuters global stock index lost almost half a percent. The FTSEurofirst 300 index dropped 0.5 per cent while emerging stocks also fell the same amount.

China's key stock index ended 1.9 per cent lower, its biggest fall in two weeks, as Agricultural Bank of China disappointed with a lackluster Shanghai debut.

AgBank, the most active stock, ended up 0.8 per cent at 2.7 yuan compared with its IPO price of 2.68 yuan.

The yen rose 0.6 per cent to 87.87 per dollar and the dollar was steady against a basket of major currencies.

The Bank of Japan said it expected the economy to grow at its fastest pace in a decade in the year to March 2011, but said the euro zone debt crisis could pose a risk to the outlook.

The central bank kept interest rates unchanged at 0.1 per cent, as widely expected.

Bund futures rose 15 ticks as falling stocks drew safe-haven demand into government bonds. US crude oil fell 0.6 percent to $76.57 a barrel.-Reuters