* Yen advance expected to be short-lived * Bank of Japan makes open-ended commitment to buy assets from 2014 * BoJ doubles inflation target to 2 percent * Euro rises versus dollar; German investor sentiment up sharply in January * Stocks mixed, Treasuries turn higher after weaker U.S. home sales By Ellen Freilich NEW YORK, Jan 22 (Reuters) - The yen rose to a three-day high against the dollar on Tuesday after the Bank of Japan said its open-ended commitment to buy assets would kick in only next year, disappointing those who expected more aggressive monetary easing. Global stock markets were mixed. Japanese equities and world indices rose on the BoJ news, but European shares dipped on a prospective price war in the French telecommunications sector. U.S. stocks were mostly higher after ending last week at five-year highs, but gains were limited with investors cautious as the earnings season picks up. Tech companies Google Inc , International Business Machines and Texas Instruments are set to report after Wall Street's close, ahead of Apple Inc's earnings release on Wednesday. The euro pared sharp losses against the yen and the dollar after a German ZEW survey showed economic sentiment at its highest since May 2012. But the key development was the Bank of Japan's plan to lift its inflation target and buy assets. Japan's central bank, under intense political pressure to overcome deflation, doubled its inflation target to 2 percent. The BoJ also said it had decided to switch to an open-ended approach to buying assets each month next year, setting no deadline for completing the purchases. "The yen strengthened after weakening since mid-November in anticipation of the BoJ's plan to set a target of 2 percent for inflation and do unlimited quantitative easing until it gets there," said Briefing.com macro analyst Jonathan Garber. Though the yen appreciated on Tuesday, Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, said its medium-term trend downward was intact. Current BoJ Governor Masaaki Shirakawa's term ends in April and since he is expected to be replaced by someone whose stance on aggressive policy easing matches that of Prime Minister Shinzo Abe, markets expect the yen to weaken. On Tuesday, however, the dollar was down 1.1 percent against the yen at 88.56. The euro was down 1.3 percent on the day at 117.78 yen, though off a session low of 117.31 yen. The euro was hurt by a German newspaper report saying Germany's regulator had ordered large banks to simulate a break-up. Against the dollar, the euro was down 0.1 percent at stood at $1.3300. The euro hit a near 10-month high a week ago and some strategists said it would likely stay firm as concerns around the euro zone crisis ease. Supporting that view was a surprisingly strong German ZEW reading on investor sentiment, a sign the euro zone crisis was no longer hitting Europe's largest economy as hard as it did last year. But Douglas Cote, chief market strategist at ING U.S. Investment Management, with $170 billion in assets under management, said the euro's rise since the start of the year could pose a problem for the euro zone and the global economy. "Europe has a growth crisis and this race by central banks to ease gives Europe much less room to do the same," he said. "Their currency is rising at the absolute worst possible time, hurting its global competitiveness." That could impair U.S. corporations' earnings growth, Cote said. "Half the revenues of U.S. corporations are from overseas and if important economies like Europe have serious problems, overall S&P 500 Q4 earnings growth expectations - at about 2 percent - could very easily be a miss," he said. "That would not bode well for stock prices." U.S. housing data has surprised on the positive side over the last few months, but news that U.S. existing home sales fell in December temporarily weakened stock prices. It also allowed safe-haven U.S. debt to erase early losses and move higher. Analysts said stock investors held back on making large bets before a batch of corporate earnings. Both the Dow and S&P 500 closed at their highest levels since December 2007 on Friday, spurred by a strong start to earnings season. U.S. markets were closed on Monday. Those indices were in the plus column again on Tuesday. The Dow Jones industrial average was up 41.43 points, or 0.3 percent, at 13,691.05. The Standard & Poor's 500 Index was up 3.33 points, or 0.22 percent, at 1,489.32. The Nasdaq Composite Index was down 1.49 points, or 0.05 percent, at 3,133.17. The benchmark 10-year Treasury note was up 3/32, its yield easing to 1.84 percent from 1.85 percent on Friday. European shares, testing two-year highs in recent days, weakened. Telecom shares weakened after Vivendi's SFR mobile operator said it was cutting prices by as much as 25 percent. The pan-European FTSEurofirst 300 closed down 0.1 percent at 1,165.49. Frankfurt's DAX fell as much as 1.4 percent on the talk but then erased about half of that loss. The MSCI world index was up 0.17 percent. Brent crude rose 0.64 percent to $112.43 a barrel, and gold stood at $1,694.19 per ounce. Growing confidence in the strength of China's economic recovery pushed copper up 1.05 percent to $8,139.75 a tonne. Bond market investors also gobbled up a new 10-year Spanish bond, its first since November 2011, as the latest evidence of rising confidence following the European Central Bank's promise to buy Spain's bonds if necessary.