German bond yields hit 1 percent for the first time since September on Wednesday as long-term inflation expectations rose, although recent rollercoaster moves in fixed-income markets kept stock markets flat.

The ongoing Greek debt drama was also in focus, with a planned meeting between leaders of Germany, France and Greece on Wednesday in doubt after European Union officials said Athens' reform proposals to unlock new funding to ward off a debt default fell well short.

The FTSEurofirst 300 .FTEU3 was flat at 0401 ET, underperforming a 0.4 rise both for MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS and for global equities overall.

The wild fluctuations in bond markets have put investors on edge at a time when the European Central Bank is battling to revive the eurozone economy and as markets increasingly expect the U.S. Federal Reserve to take the opposite tack and hike interest rates before the year is out.

The U.S. dollar index .DXY hit a three-week low, with analysts pointing to debate around the G7 summit regarding the speed of the dollar's rise as the U.S. prepares to end years of cheap central-bank cash.

Traders said investors had cut back their positions amid the volatility and said the sell-off in bonds was likely to go on.

"Deflation fears have ebbed...It looks like the sell-off is likely to continue," said Nick Stamenkovic, bond strategist at RIA Capital Markets.

In commodities, oil prices rose as U.S inventories were set to drop further and after the Energy Information Administration (EIA) raised its 2015 oil demand growth forecast. [O/R]

Mainland Chinese shares, currently dominated by retail Chinese investors, see-sawed after U.S. index provider MSCI Inc (MSCI.N) said on Tuesday it will hold off including China-listed shares in its widely tracked indexes. Hopes for fresh stimulus buoyed the market despite the initial setback.

MSCI also said it expects China-listed shares to be incorporated once outstanding market accessibility issues are resolved - a move that could inject an estimated $400 billion of funds from asset managers to mainland shares.

The Turkish lira rose 0.7 percent after two days of losses that saw it hit record lows against the dollar on post-election uncertainty TRY= and Fed rate hike expectations, while the Russian rouble firmed 1.5 percent thanks to a jump in oil prices RUB=.