* OPEC agrees on first output cut since 2008
* US crude elevated after soaring more than 9 pct overnight
* Bond rout continues as oil rally stokes inflation
* Dollar rises to 9-month high vs yen as Treasury yields
* Gold stoops to 10-month lows, hit by bullish dollar
* MSCI Asia-Pacific index up 0.4 pct, Nikkei hits 11-mth
* Spreadbetters expect European shares to open little
By Shinichi Saoshiro
TOKYO, Dec 1 Oil prices and energy shares swept
higher on Thursday after OPEC agreed to cut crude output to
clear a glut, while the dollar and bond yields rose sharply on
prospects that resulting inflationary pressures will lead to
higher interest rates.
Spreadbetters expected Britain's FTSE, Germany's DAX
and France's CAC to open little changed after
Wall Street's flat performance overnight.
The Organization of the Petroleum Exporting Countries on
Wednesday agreed to its first output cut since 2008, finally
taking action after global oil prices fell by more than half in
the last two years.
Non-OPEC Russia will also join output reductions for the
first time in 15 years.
U.S. crude oil added to overnight gains of 9 percent
to reach $50.00 a barrel for the first time since late October.
Brent crude, which soared $4 overnight, touched a
six-week peak of $52.35 a barrel.
The jump in oil prices added to inflation expectations in
the United States, which were already high on prospects that
president-elect Donald Trump would adopt reflationary policies
using a large fiscal stimulus.
As a result U.S. Treasuries resumed their rout, with prices
sliding and yields spiking, to send the dollar rallying against
its peers. The yield on 30-year bonds, which are
most sensitive to inflation eroding their value, has climbed 9
basis points since late Tuesday, heading back towards a 14-month
peak of 3.09 percent marked last week.
"The reflation trade continues to work in earnest, this time
Trump has taken a back seat and OPEC and Russia have taken the
initiative and lit the fuse under the oil price," wrote Chris
Weston, chief market strategist at IG in Melbourne.
"The consensus was that we would get some sort of loose
agreement from the collective that kept oil supported, but left
the market asking many more questions. What we have seen however
has been real meat on the bone."
If the bounce in oil prices gathers pace after the OPEC deal
it was expected to have a broad implication on the global
Brent is off the 12-year low of $27 per barrel marked in
January but still less than half of where they were in 2014.
Economists expect a further recovery in crude to bode well
for oil-exporting economies, while potentially easing
deflationary pressures in developed economies locked in a battle
against falling prices.
OPEC's output cut is also seen as a boon for U.S. shale
producers, rivals to the oil cartel. The S&P energy index
jumped nearly 5 percent on Wednesday.
In currencies, the dollar advanced to a 9-1/2-month high of
114.830 yen before pulling back to 114.060.
Steven Mnuchin, Trump's pick to lead the U.S. Treasury, gave
no hint of any unease at the strong dollar in his first remarks
since being named for the job, giving traders fresh impetus to
buy the greenback.
"I think it is just a matter of time that the dollar will
test 115 yen after Mnuchin was silent about the dollar's
strength," said Masafumi Yamamoto, chief currency strategist at
The euro was steady at $1.0604 after shedding 0.6
percent the previous day.
The dollar index was a shade lower at 101.38 after
rallying overnight from a low of 100.84.
In Asian equities, Australian stocks were up 0.9
percent and Japan's Nikkei hit an 11-month peak. Tokyo's
mining sub-sector jumped more than 10 percent and was
the biggest gainer on board.
MSCI's broadest index of Asia-Pacific shares outside Japan
was up 0.6 percent. Shanghai gained 0.5
Japan Petroleum Exploration Co rose 12 percent,
posting its biggest intraday gain since March 2013. Hong Kong
shares in China's oil giants Sinopec, PetroChina
and CNOOC gained as much as 4.8 percent, 6.1
percent and 8 percent, respectively.
Spot gold touched a 10-month low of $1,163.45 on the
dollar's oil-induced surge. Silver and platinum
(Reporting by Shinichi Saoshiro; Additional reporting by
Hideyuki Sano in Tokyo; Editing by Simon Cameron-Moore)