* IMF inaction means emerging assets still in favour
* Stocks rise, dollar slips
* U.S., Japan markets closed for holidays
By Jeremy Gaunt, European Investment Correspondent
LONDON, Oct 11 (Reuters) - World stocks rose and the dollar
slipped on Monday as investors bet on further asset buying by
the U.S. Federal Reserve and a continuation of global currency
flows towards emerging markets.
The dollar slid to a 15-year low against the yen <JPY=> and
was flat to weaker against the euro <EUR=>. U.S. and Japanese
markets were closed for holidays.
Finance policymakers meeting over the weekend in Washington
produced no quick fix for global economic imbalances, providing
no barriers to the cheap money trade of selling dollars to buy
emerging market assets and commodities.
Reflecting this, MSCI's main emerging market stock index
<.MSCIEF> was up another half a percent for a nearly 12 percent
year-to-date gain. JPMorgan's EMBI+ index <11EMJ> also showed
investors snapping up emerging market government debt.
Both moves are continuations of recent massive flows into
emerging markets in a bid for higher yields and higher growth
than are available in developed economies, particularly the
United States.
EPFR Global said in its latest flow report at the end of
last week that emerging market equity fund flows had hit a
33-month high and emerging bond funds had absorbed more than $1
billion in a week.
"It is increasingly being seen as the trade for all
seasons," said David Shairp, global strategist at JPMorgan Asset
Management.
Friday's U.S. jobs data, which was worse than expected,
raised expectations that the Fed will buy more assets under its
quantitative easing (QE) programme, essentially trying to pump
up the ailing U.S. economy by printing more money.
This generally drives investments out of dollar assets and
towards higher-yielding ones.
But Shairp reckons many in the markets also see the flow
patterns continuing even if there is no new QE, with investors
then betting on higher growth abroad than in the U.S. economy.
Hence the trade for all seasons.
EUROPE ALONE
With the U.S. and Japan closed, developed market trading
centred on Europe, where the FTSEurofirst 300 <> gained
0.2 percent, taking the year-to-date gain up to around 2.5
percent.
The focus was mainly on U.S. events.
"The market is clearly expecting quantitative easing and has
priced that in," said Richard Lacaille, global chief investment
officer at State Street in London. "The (U.S.) data continue to
be as expected, part of a slow recovery."
Attention was also beginning to build on the upcoming
earnings season. Intel <INTC.O> and JP Morgan <JPM.N> are among
companies reporting later in the week.
On currency markets, the dollar slipped. It was down 0.1
percent against a basket of major currencies <.DXY>.
"There looks to be no basis for agreement on currency
imbalances from the weekend meetings and the U.S. looks set to
continue to pursue loose monetary policy going forward" said
Neil Mellor, currency strategist at Bank of New York Mellon.
The dollar sank to 81.37 yen in early Asia trade, triggering
another round of speculation about possible intervention by
Japan to weaken the yen. It was later at 82 yen.
The euro was flat at $1.3939.
Euro zone government bond yields were flat to higher.
(Additional reporting by Neal Armstrong and Brian Gorman;
Editing by John Stonestreet)
