* Global stocks up as Dubai fears wane
* Yen falls as BOJ disappoints
* Dollar generally lower
By Jeremy Gaunt, European Investment Correspondent
LONDON, Dec 1 (Reuters) - Worries about Dubai's debt slipped
away on financial markets on Tuesday, allowing stocks to put in
solid gains and weakening low-yield assets such as the dollar.
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
0.9 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 1.6
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 0.4 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 86.94 yen
<JPY=> and the euro rose 1 percent against the Japanese currency
<.EURJPY=>.
"I think it's a bit disappointing for the markets especially
when they could have done much more ... such as increasing
quantitative easing, raising JGB buybacks," said Mitul Kotecha,
global head of FX strategy at Calyon in Hong Kong.
"The market was looking for more, and that is one reason why
dollar/yen has dropped so sharply after the move."
Longer-dated euro zone government bond prices fell as
stocks rose and the Dubai worries waned.
(Additional reporting by Simon Falush)
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((jeremy.gaunt@thomsonreuters.com; +44 207 542 1028; Reuters
Messaging: jeremy.gaunt.reuters.com@reuters.net))
