GLOBAL MARKETS-Deficit-cutting plan boosts U.S. bonds, dollar

                                
 * White House budget scheme stokes bond, dollar bets
                                
 * Wall Street stages late bounce, JP Morgan weighs
                                
 * Oil rebounds on big gasoline stock decline; gold rises
                                
 * Yen slips as Japan downgrades economic outlook
 (Updates markets with closing Wall Street levels)
                                
 By Richard Leong
                                
 NEW YORK, April 13 (Reuters) - U.S. bonds and the dollar
rose on Wednesday on hopes that President Barack Obama's $4
trillion deficit reduction plan would shore up the United
States' credit-worthiness and the dollar's reserve status.
                                
 Oil jumped 1.5 percent, recovering from two days of losses,
after data showed the biggest weekly decline in gasoline
inventory since October 1998. For more, see [ID:nLDE73C0V1]
                                
 Obama set a time-frame of 12 years or less to reach the
goal of $4 trillion in U.S. deficit reduction as he warned that
steadily rising debt could cost jobs, harm the economy and
force Washington to borrow more from other countries such as
China. [ID:nN12216395]
                                
 "It's a positive from a credit and currency perspective.
It's positive in the sense that the U.S. can (better) meet its
obligations," said James Caron, global head of rates research
at Morgan Stanley in New York.
                                
 The yield on benchmark U.S. 10-year government debt fell to
the lowest level in a week, while the dollar posted gains
versus the yen and euro.
                                
 As government leaders wrestle over how to tackle United
States' long-term fiscal predicament, investors were reticent to commit to stocks and other risky assets on uncertainties
over the durability of global economic and profit growth.
                                
 Wall Street ended flat to slightly higher after struggling
much of the session on doubts over corporate profits. An
initial rise in U.S. stocks fizzled, despite strong profit
growth from JPMorgan Chase & Co <JPM.N>, the No. 2 U.S. bank.
Analysts questioned whether the results from JPMorgan, the
first major Wall Street bank to report this quarter, were a
one-time win or a harbinger of others' performance. For more,
see [.N]
                                
 The view reined in a rebound in global stocks.
                                
 "People are getting the sense that no matter what these
companies say, the easy money has already been made so it will
be tough to see further upward movement," said Rick Fier, vice
president at Conifer Securities in New York, which has about $7
billion in assets under administration.
                                
 The Dow Jones industrial average <.DJI> closed up 0.06
percent at 12,270.99, while the Standard & Poor's 500 Index
<.SPX> was up 0.02 percent at 1,314.41. The Nasdaq Composite
Index <.IXIC> rose 0.61 percent to 2,761.52.
                                
 World stocks as measured by MSCI <.MIWD00000PUS> were up
0.3 percent.
                                
 Earlier, the FTSEurofirst 300 <.FTEU3>, the index of
Europe's top shares, closed up 0.7 percent, a day after posting
its biggest one-day fall in a month. Bank shares rose, boosted
by the JPMorgan results.
                                
 Japan's Nikkei index <.N225> rose 0.9 percent on the day on
thin volume.
                                
 COMMODITIES STAGE LATE BOUNCE
                                
 Like stocks, commodities had a roller-coaster session.
                                
 The price of Brent crude oil <LCOc1> ended up more than
$1.50 at $122.61 a barrel after a two-day sell-off caused by
worries that high prices would crimp demand.
                                
 U.S. oil prices <CLc1> closed up 0.7 percent at $106.96,
erasing mid-afternoon losses.
                                
 Gold <XAU=> closed up about $3 at $1,456.74 an ounce after
earlier rising as high $1,462 on a weaker dollar.
                                
 The dollar rebounded against the yen after the Japanese
government lowered its economic outlook to reflect last month's
devastating earthquake and tsunami, its first downgrade in six
months. The dollar was up 0.3 percent at 83.83 yen <JPY=>, a
day after the greenback recorded its biggest one-day percentage
drop in four months. [ID:nL3E7FD0DS]
                                
 The euro <EUR=> was down 0.3 percent at $1.4437, after
earlier hitting a 15-month peak of $1.4521 on the EBS trading
platform.
                                
 Overall sentiment toward the greenback, however, remains
largely bearish given expectations the U.S. Federal Reserve
will significantly lag global central banks in raising interest
rates.
                                
 In bond trading, U.S. government debt prices rose, erasing
earlier losses, despite weaker-than-expected results at a $21
billion auction of 10-year notes. For more, see [US/]
                                
 The benchmark 10-year Treasury yield <US10YT=RR> hit a
one-week low at 3.48 percent. For more, see [US/]
 (Additional reporting by Ryan Vlastelica, Julie Haviv, Carol
Vaporean and Gene Ramos; Editing by Dan Grebler)