World stocks edged up toward last week's three-month peak on Monday while the dollar held near a 15-year low versus the yen on rising expectations the Federal Reserve could soon buy bonds to support the economy.

Weaker-than-expected U.S. jobs data in July fanned speculation the Fed may send a clear signal when it meets on Tuesday that it is prepared to print more money to counter renewed economic weakness.

The prospect of the Fed increasing the amount of cash floating around the financial system through purchases of U.S. bonds has been dragging on the dollar, while the possibility of even greater economic stimulus aided risky assets.

A downgrading of its economic and inflation assessment may be considered a potential precursor to renewed action in coming months should things not start to improve, said Tom Levinson, currency strategist at ING. The MSCI world equity index rose 0.3 percent while the Thomson Reuters global stock index gained the same amount.

The FTSEurofirst 300 index rose more than 1.2 percent on the day while emerging stocks added half a percent.

U.S. stock futures rose 0.3 percent, pointing to a firmer open on Wall Street later.

The dollar slipped toward a 15-year low below 85 yen before reversing to 85.61. It was steady against a basket of major currencies.

With the unemployment rate rising, we now expect the FOMC to re-engage in unconventional easing through asset purchases (of U.S. Treasuries) and/or a more ironclad commitment to lower short rates, Goldman Sachs said in a note to clients.

While a close call, we think the FOMC will announce that they will reinvest the paydown of Mortgage Backed Securities in the bond market. This would probably be packaged as 'preventing a tightening' but the market is likely to see it as a step - albeit a baby one - toward renewed easing.

The positive correlation between U.S. and Japanese two-year yield spreads, which have been narrowing, and the dollar/yen rate has strengthened to its highest since the period just after the collapse of Lehman Brothers two years ago.

Given that, investors believe it is only a matter of time before the dollar hits a 15-year low against the yen.

A weaker dollar helped U.S. crude oil rise 1.1 percent to $81.60 a barrel.

The bund futures was steady.

(Additional reporting by Tamawa Desai; Editing by Hugh Lawson)

Quantitative easing