* Brent crude sinks over $2 a barrel on groundbreaking Iran deal
* Iran deal seen positive for risk appetite, global growth
* Yen remains under pressure, euro makes four-year highs
By Wayne Cole
SYDNEY, Nov 25 Oil prices fell sharply on Monday after Iran and six world powers sealed a deal curbing its nuclear programme, a fillip for global economic growth and risk appetites that should benefit share markets.
The agreement, reached late Sunday, gives Iran some relief from crippling sanctions. While it will not be allowed to increase its oil sales for six months, any easing of Middle East tensions tends to lead to lower crude prices.
Brent crude oil shed $2.29 to $108.69 a barrel, its biggest daily drop in a month. U.S. oil dived $1.09 to $93.75 a barrel.
Attention in Asia will again be on Japanese markets as a weak yen promises to boost exports and profits. While the Nikkei ran into profit-taking on Friday it still ended the week up 1.4 percent, and has gained almost 10 percent in as many sessions.
On Wall Street, the Dow Jones industrial average ended Friday with gains of 0.34 percent, while the S&P 500 added 0.5 percent for its first ever close above 1,800.
MSCI's all-country world equity index rose 0.43 percent.
But with money flooding into developed world assets, emerging markets are getting cold shouldered. It was notable that MSCI's broadest index of Asia-Pacific shares outside Japan failed to make any headway at all last week, even as Wall Street made new peaks.
Early Monday, the index was up 0.2 percent, as Australian shares led the way with an increase of 0.7 percent.
In currency markets, the yen remained under pressure as investors use it for carry trades -- borrowing the currency at super-low rates to invest in higher-yielding assets elsewhere.
The dollar was up at 101.27 yen and just off a four-month peak. Dealers said most of the action was in the euro against the yen, which has had a barnstorming run to reach four-year highs above 137 yen.
Euro-yen bulls now have their eyes set on a series of peaks from 2009 ranging from 137.43 all the way to 139.18, the top for that year. A break of the latter would take the euro to territory not visited since October 2008 and would be considered very bullish from a technical view.
Oddly, the gains have come even as the European Central Bank sounds ever more dovish on policy.
Over the weekend ECB Executive Board members Benoit Coeure and Joerg Asmussen both said the central bank was ready to take further action if necessary and instruments at its disposal included negative deposit rates.
The single currency has been particularly strong against the Australian dollar, which was undone by threats of intervention from the Reserve Bank of Australia.
The euro leaped almost four full cents last week as the Australian currency crumpled to a three-month trough.
Traders said the commodity currency could continue to struggle particularly if tensions between China and Japan grew.
China at the weekend suddenly imposed new rules on airspace over islands at the heart of a territorial dispute with Tokyo, prompting Japan and ally the United States to warn of an escalation into the "unexpected".
There is no major economic data due in Asia on Monday, while most of the U.S. economic releases will be front-loaded this week ahead of the Thanksgiving holiday on Thursday.
The U.S. diary includes figures on housing starts and prices, consumer confidence, durable goods orders and manufacturing in the Chicago area.