* Global stocks up as Dubai fears wane
* Europe up 2 pct, Wall Street set for gains
* Yen falls after BOJ move; dollar generally lower
By Jeremy Gaunt, European Investment Correspondent
LONDON, Dec 1 (Reuters) - Worries about Dubai's debt slipped
away from financial markets on Tuesday, sending stocks up
sharply higher and weakening lower-yielding assets such as
long-term government bonds and the dollar.
Wall Street looked set for a solid start as global equities
rebounded from recent weakness.
The catalyst was an announcement late on Monday from Dubai
World, centre of the debt storm, that its planned restructuring
of some units involved $26 billion in debt, easing some concerns
about the size of Dubai's financial problems.
MSCI's all-country world stock index <.MIWD00000PUS> was up
1 percent while its emerging markets counterpart <.MSCIEF>
gained more than 1 percent.
"The market is acknowledging that the Dubai crisis is
contained to the region itself," said Heino Ruland, strategist
at Ruland Research, in Frankfurt.
European shares bounced back from Dubai-triggered falls in
the previous session. Th FTSEurofirst 300 <> was 2 percent
higher, having fallen 1.4 percent on Monday.
Banks were among the strongest gainers, having been hit by
fears of exposure to possibly defaulting Dubai debt.
The crisis hit last week when Dubai told creditors of Dubai
World and property group Nakheel that debt repayments could be
delayed.
The fear added to investors' desire to lock in some of
2009's market profits ahead of the new year.
Reuters polls released on Monday showed global investors
cutting back on riskier assets even before the Dubai
announcement. []
YEN FALLS ON BOJ
The return of relative risk appetite drained the dollar of
support, sending it down half a percent against a basket of
major currencies <.DXY>.
Much attention on the currency markets, however, was focused
on Japan where the Bank of Japan fell short of expectations for
more aggressive easing measures to support the economy.
It said it would introduce a new operation to provide funds
for three months at a fixed interest rate of 0.1 percent, in a
bid to enhance monetary easing by trying to bring down
longer-term rates. []
The dollar was up three-quarters of a percent at 87.53 yen
<JPY=>, having hit a 14-year low of 84.81 yen last week. The
euro rose 0.9 percent against the Japanese currency <EURJPY=>.
"The message is that the BOJ isn't completely indifferent to
currency rates, and this should at least be marginally
yen-negative," said Adam Cole, global head of currency strategy
at RBC.
Longer-dated euro zone government bond prices fell as
stocks rose and the Dubai worries waned.
(Additional reporting by Simon Falush; Editing by Ron Askew)
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((jeremy.gaunt@thomsonreuters.com; +44 207 542 1028; Reuters
Messaging: jeremy.gaunt.reuters.com@reuters.net))
