Dollar, U.S. bond yields drop as oil tumbles on output cut doubts

By Hideyuki Sano | TOKYO

TOKYO The dollar and U.S. bond yields fell on Monday as investors reversed a "Trumpflation" trade that has gripped markets since the U.S. elections, after oil prices slid on fears that producer countries meeting this week could fail to agree an output cut.

Brent crude futures last traded at $47.13 per barrel LCOc1, down slightly on the day, after having fallen by as much as 2.0 percent in early Asian trade, following on from a 3.6 percent fall on Friday as doubts arose over whether the Organization of the Petroleum Exporting Countries would reach a deal later this week.

Prospects of reduced upward pressure on inflation from oil prices, prompted investors to temper expectations for rises in U.S. interest rates, bring down treasury yields and the dollar.

That gave some relief to Asian shares, which had underperformed on worries about capital flight to higher-yielding U.S markets in the weeks since Donald Trump's Nov.8 election win.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.6 percent, led by gains in Hong Kong .HSI and Taiwan .TWII.

In contrast, U.S. stock futures ESc1 slipped 0.2 percent after their stellar performance this month on hopes President-elect Trump's policy of fiscal spending, deregulation and protection of domestic industries will boost U.S. inflation and benefit Corporate America.

European shares are expected to dip, with spread-betters looking at a fall of 0.2 percent in Germany's DAX .GDAXI and 0.1 percent in Britain's FTSE .FTSE.

Japan's Nikkei average .N225, which had performed even better than Wall Street thanks to the yen's fall, ended down 0.1 percent.

"It will be scary to think markets may fully reverse their moves since the elections, changing their mind that Trump's policy may not be so good after all," said Bart Wakabayashi, head of Hong Kong FX sales at State Street Global Markets.

Wall Street's four main indexes .DJI .SPX .IXIC all hit record highs last week, a feat last achieved in 1999.

Yet some investors question whether the market may have got carried away with optimism on Trump's policy, given the uncertainty on the political neophyte's presidency, including on how closely he can work together with the Congress.

But languishing oil prices, giving investors a more immediate reason to have second thoughts about how prospects for inflation and U.S. interest rates.

Saudi Arabia said on Friday it will not attend talks on Monday with non-OPEC producers to discuss supply cuts.

"Oil prices have fallen considerably on worries about the deal. That would pressure energy shares, and could hit the entire stock markets. Given their rally in recent days, it's no surprise to see some adjustment," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

Saudi Arabia's energy minister Khalid al-Falih said on Sunday that he believed the oil market would balance itself in 2017 even if producers did not intervene, and that keeping output at current levels could therefore be justified.

His comments raised worries that a preliminary agreement reached in September for OPEC to reduce output to between 32.5 million and 33 million barrels per day may fall apart when OPEC ministers meet on Wednesday to finalize that deal.

OPEC also wants non-OPEC producers such as Russia to support the intervention by curbing their output and many market players still expect them to reach a deal.

As lower oil prices reduce inflationary pressure, they sapped momentum for a sell-off in U.S. Treasuries and a rally in the dollar, the market's favorite play since the U.S. election.

The dollar sank more than 1.6 percent against the yen to as low as 111.355 yen JPY=, down sharply from its eight-month high of 113.90 set just on Friday. It last traded at 111.90 yen.

"As long as the dollar holds above 111-111.50 yen, I do not judge the (dollar's rising) trend has changed," said Koichi Yoshikawa, executive director of financial markets at Standard Chartered in Tokyo.

The dollar's index against a basket of six major currencies .DXY =USD stood at 100.88, slipping 0.6 percent on day and off its 13 1/2-year high of 102.05 touched on Thursday.

The dollar shed more than 0.5 percent against many emerging market currencies, including the Mexico peso MXP=, the biggest loser after Trump's election victory, the South African rand ZAR= and the Turkish lira TRY=.

The euro EUR= gained 0.8 percent to $1.0655, extending its rebound from its near one-year low of $1.0518 touched on Thursday.

The single currency has so far shown limited reaction to the French conservatives' presidential primaries on Sunday.

Former Prime Minister Francois Fillon, a socially conservative free-marketeer, won the run-off, setting up a likely showdown next year with far-right leader Marine Le Pen that the pollsters expect him to win.

Gold XAU= bounced back to $1,192.0 per ounce from Friday's low $1,171.5, which was its lowest level since early February.

The yield on 10-year U.S. Treasuries US10YT=RR dropped almost 5 basis points to 2.323 percent, off its 16-month high of 2.417 percent touched on Thursday.

On the other hand, some commodities gained sharply on hopes of strong demand for property and infrastructure investment in China and the United States.

Chinese steel futures SRBcv1 jumped over 6 percent, while iron ore futures DCIOcv1 also gained about six percent and zinc CMZN3, used to galvanize steel, powered to a nine-year high on the London Metal Exchange.

(Editing by Simon Cameron-Moore)

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Fukushima nuclear decommission, compensation costs to almost double: media

TOKYO Japan's trade ministry has almost doubled the estimated cost of compensation for the 2011 Fukushima nuclear disaster and decommissioning of the damaged Fukushima-Daiichi nuclear plant to more than 20 trillion yen ($177.51 billion), the Nikkei business daily reported on Sunday.

The trade ministry at the end of 2013 calculated the cost at 11 trillion yen, which was comprised of 5.4 trillion yen for compensation, 2.5 trillion yen for decontamination, 1.1 trillion yen for an interim storage facility for contaminated soil, and 2 trillion yen for decommissioning, the report said.

The new estimate raised the cost of compensation to 8 trillion yen and decontamination to 4-5 trillion yen, the cost for an interim storage facility remained steady, and decommissioning will rise by several trillion yen, it added.

The part of the cost increase will be passed on in electricity fees, it added, citing multiple unnamed sources familiar with the matter.

The ministry could not provide immediate comment.

On March 11, 2011, a massive 9 magnitude earthquake, the strongest quake ever recorded in Japan, created three tsunamis that knocked out the Fukushima-Daiichi plant, causing the worst nuclear crisis since Chernobyl a quarter of a century earlier.

The Ministry of Economy, Trade and Industry will discuss with the Ministry of Finance a possible expansion of the interest-free loan program from 9 trillion yen, to help support the finances of the Fukushima plant operator Tokyo Electric Power Co's, the report said.

The cost of cleaning up Tokyo Electric Power's wrecked Fukushima-Daiichi nuclear plant may rise to several billion dollars a year, from less than $800 million per year now, the Japanese government said last month.

The Mainichi newspaper reported in October that Japan's utilities lobby expects clean-up and compensation costs from the Fukushima disaster to overshoot previous estimates by 8.1 trillion yen.

(Reporting by Osamu Tsukimori; Editing by Michael Perry)

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Dollar, U.S. bond yields drop as oil tumbles on output cut doubts

By Hideyuki Sano | TOKYO

TOKYO The dollar and U.S. bond yields fell on Monday as investors reversed a "Trumpflation" trade that has gripped markets since the U.S. elections, after oil prices slid on fears that producer countries meeting this week could fail to agree an output cut.

Brent crude futures last traded at $47.13 per barrel LCOc1, down slightly on the day, after having fallen by as much as 2.0 percent in early Asian trade, following on from a 3.6 percent fall on Friday as doubts arose over whether the Organization of the Petroleum Exporting Countries would reach a deal later this week.

Prospects of reduced upward pressure on inflation from oil prices, prompted investors to temper expectations for rises in U.S. interest rates, bring down treasury yields and the dollar.

That gave some relief to Asian shares, which had underperformed on worries about capital flight to higher-yielding U.S markets in the weeks since Donald Trump's Nov.8 election win.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.6 percent, led by gains in Hong Kong .HSI and Taiwan .TWII.

In contrast, U.S. stock futures ESc1 slipped 0.2 percent after their stellar performance this month on hopes President-elect Trump's policy of fiscal spending, deregulation and protection of domestic industries will boost U.S. inflation and benefit Corporate America.

European shares are expected to dip, with spread-betters looking at a fall of 0.2 percent in Germany's DAX .GDAXI and 0.1 percent in Britain's FTSE .FTSE.

Japan's Nikkei average .N225, which had performed even better than Wall Street thanks to the yen's fall, ended down 0.1 percent.

"It will be scary to think markets may fully reverse their moves since the elections, changing their mind that Trump's policy may not be so good after all," said Bart Wakabayashi, head of Hong Kong FX sales at State Street Global Markets.

Wall Street's four main indexes .DJI .SPX .IXIC all hit record highs last week, a feat last achieved in 1999.

Yet some investors question whether the market may have got carried away with optimism on Trump's policy, given the uncertainty on the political neophyte's presidency, including on how closely he can work together with the Congress.

But languishing oil prices, giving investors a more immediate reason to have second thoughts about how prospects for inflation and U.S. interest rates.

Saudi Arabia said on Friday it will not attend talks on Monday with non-OPEC producers to discuss supply cuts.

"Oil prices have fallen considerably on worries about the deal. That would pressure energy shares, and could hit the entire stock markets. Given their rally in recent days, it's no surprise to see some adjustment," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

Saudi Arabia's energy minister Khalid al-Falih said on Sunday that he believed the oil market would balance itself in 2017 even if producers did not intervene, and that keeping output at current levels could therefore be justified.

His comments raised worries that a preliminary agreement reached in September for OPEC to reduce output to between 32.5 million and 33 million barrels per day may fall apart when OPEC ministers meet on Wednesday to finalize that deal.

OPEC also wants non-OPEC producers such as Russia to support the intervention by curbing their output and many market players still expect them to reach a deal.

As lower oil prices reduce inflationary pressure, they sapped momentum for a sell-off in U.S. Treasuries and a rally in the dollar, the market's favorite play since the U.S. election.

The dollar sank more than 1.6 percent against the yen to as low as 111.355 yen JPY=, down sharply from its eight-month high of 113.90 set just on Friday. It last traded at 111.90 yen.

"As long as the dollar holds above 111-111.50 yen, I do not judge the (dollar's rising) trend has changed," said Koichi Yoshikawa, executive director of financial markets at Standard Chartered in Tokyo.

The dollar's index against a basket of six major currencies .DXY =USD stood at 100.88, slipping 0.6 percent on day and off its 13 1/2-year high of 102.05 touched on Thursday.

The dollar shed more than 0.5 percent against many emerging market currencies, including the Mexico peso MXP=, the biggest loser after Trump's election victory, the South African rand ZAR= and the Turkish lira TRY=.

The euro EUR= gained 0.8 percent to $1.0655, extending its rebound from its near one-year low of $1.0518 touched on Thursday.

The single currency has so far shown limited reaction to the French conservatives' presidential primaries on Sunday.

Former Prime Minister Francois Fillon, a socially conservative free-marketeer, won the run-off, setting up a likely showdown next year with far-right leader Marine Le Pen that the pollsters expect him to win.

Gold XAU= bounced back to $1,192.0 per ounce from Friday's low $1,171.5, which was its lowest level since early February.

The yield on 10-year U.S. Treasuries US10YT=RR dropped almost 5 basis points to 2.323 percent, off its 16-month high of 2.417 percent touched on Thursday.

On the other hand, some commodities gained sharply on hopes of strong demand for property and infrastructure investment in China and the United States.

Chinese steel futures SRBcv1 jumped over 6 percent, while iron ore futures DCIOcv1 also gained about six percent and zinc CMZN3, used to galvanize steel, powered to a nine-year high on the London Metal Exchange.

(Editing by Simon Cameron-Moore)

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CFL: Burris leads Redblacks to shock Grey Cup victory

By Steve Keating | TORONTO

TORONTO Henry Burris threw three touchdowns, including one in overtime, and ran in two others as the Ottawa Redblacks stunned the Calgary Stampeders 39-33 to win the 104th Grey Cup in one of the biggest upsets in Canadian Football League history on Sunday.

Burris was named the game's Most Valuable Player after completing 35-of-46 passes, none bigger than the 11-yard strike to Ernest Jackson in overtime that gave Ottawa their first Grey Cup for 40 years, when the team were known as the Rough Riders.

The 41-year-old Burris, who also connected on touchdown passes to Brad Sinopoli and Patrick Lavoie and threw for a total of 461 yards, became the oldest quarterback to lead his team to a Grey Cup triumph.

The Redblacks' victory over the heavily favored Stampeders also erased the disappointment of losing to the Edmonton Eskimos in last year's title showdown.

"It was almost a situation where I wasn't able to play today, my knee locked up on me before the game but I wouldn't accept that," said Burris, who guided the Stampeders to the CFL championship in 2008.

"For all those haters out there, all those organizations who haven't won a Grey Cup for decades, here we are.

"Right now all I want to do is enjoy the party."

The Redblacks ended the season with an 8-9-1 record and were not expected to represent much of a problem for a Calgary juggernaut that had ripped through the schedule (15-2-1) behind the league's outstanding quarterback Bo Levi Mitchell.

But Ottawa fans, who had seen both the Rough Riders and Renegades fold since they last celebrated a Grey Cup in 1976, were ready to party early as the Redblacks rolled to 20-7 halftime lead.

When Burris found Sinopoli with a nine-yard touchdown pass to open the second half, some in the sellout crowd at BMO Field were already preparing to make a swift exit and avoid the rush.

The Stampeders, however, would not go down without a fight, turning the rout into a nail-biter by scoring 10 points on a DaVaris Daniels touchdown run and Rene Paredes field goal in the final two minutes to send the game into overtime.

Even the decisive touchdown did not come without a fright as Jackson wildly juggled the ball before finally gaining control as he crossed into the end zone to cement the victory.

"It hurts, we made the largest comeback in Grey Cup history we just didn't finish it," said Mitchell, who tossed two touchdowns but was intercepted three times. "We had the opportunity we put ourselves in perfect position to finish it."

(Editing by Peter Rutherford/John O'Brien)

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Dollar, U.S. bond yields drop as oil tumbles on output cut doubts

By Hideyuki Sano | TOKYO

TOKYO The dollar and U.S. bond yields fell on Monday as investors reversed a "Trumpflation" trade that has gripped markets since the U.S. elections, after oil prices slid on fears that producer countries meeting this week could fail to agree an output cut.

Brent crude futures last traded at $47.13 per barrel LCOc1, down slightly on the day, after having fallen by as much as 2.0 percent in early Asian trade, following on from a 3.6 percent fall on Friday as doubts arose over whether the Organization of the Petroleum Exporting Countries would reach a deal later this week.

Prospects of reduced upward pressure on inflation from oil prices, prompted investors to temper expectations for rises in U.S. interest rates, bring down treasury yields and the dollar.

That gave some relief to Asian shares, which had underperformed on worries about capital flight to higher-yielding U.S markets in the weeks since Donald Trump's Nov.8 election win.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.6 percent, led by gains in Hong Kong .HSI and Taiwan .TWII.

In contrast, U.S. stock futures ESc1 slipped 0.2 percent after their stellar performance this month on hopes President-elect Trump's policy of fiscal spending, deregulation and protection of domestic industries will boost U.S. inflation and benefit Corporate America.

European shares are expected to dip, with spread-betters looking at a fall of 0.2 percent in Germany's DAX .GDAXI and 0.1 percent in Britain's FTSE .FTSE.

Japan's Nikkei average .N225, which had performed even better than Wall Street thanks to the yen's fall, ended down 0.1 percent.

"It will be scary to think markets may fully reverse their moves since the elections, changing their mind that Trump's policy may not be so good after all," said Bart Wakabayashi, head of Hong Kong FX sales at State Street Global Markets.

Wall Street's four main indexes .DJI .SPX .IXIC all hit record highs last week, a feat last achieved in 1999.

Yet some investors question whether the market may have got carried away with optimism on Trump's policy, given the uncertainty on the political neophyte's presidency, including on how closely he can work together with the Congress.

But languishing oil prices, giving investors a more immediate reason to have second thoughts about how prospects for inflation and U.S. interest rates.

Saudi Arabia said on Friday it will not attend talks on Monday with non-OPEC producers to discuss supply cuts.

"Oil prices have fallen considerably on worries about the deal. That would pressure energy shares, and could hit the entire stock markets. Given their rally in recent days, it's no surprise to see some adjustment," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

Saudi Arabia's energy minister Khalid al-Falih said on Sunday that he believed the oil market would balance itself in 2017 even if producers did not intervene, and that keeping output at current levels could therefore be justified.

His comments raised worries that a preliminary agreement reached in September for OPEC to reduce output to between 32.5 million and 33 million barrels per day may fall apart when OPEC ministers meet on Wednesday to finalize that deal.

OPEC also wants non-OPEC producers such as Russia to support the intervention by curbing their output and many market players still expect them to reach a deal.

As lower oil prices reduce inflationary pressure, they sapped momentum for a sell-off in U.S. Treasuries and a rally in the dollar, the market's favorite play since the U.S. election.

The dollar sank more than 1.6 percent against the yen to as low as 111.355 yen JPY=, down sharply from its eight-month high of 113.90 set just on Friday. It last traded at 111.90 yen.

"As long as the dollar holds above 111-111.50 yen, I do not judge the (dollar's rising) trend has changed," said Koichi Yoshikawa, executive director of financial markets at Standard Chartered in Tokyo.

The dollar's index against a basket of six major currencies .DXY =USD stood at 100.88, slipping 0.6 percent on day and off its 13 1/2-year high of 102.05 touched on Thursday.

The dollar shed more than 0.5 percent against many emerging market currencies, including the Mexico peso MXP=, the biggest loser after Trump's election victory, the South African rand ZAR= and the Turkish lira TRY=.

The euro EUR= gained 0.8 percent to $1.0655, extending its rebound from its near one-year low of $1.0518 touched on Thursday.

The single currency has so far shown limited reaction to the French conservatives' presidential primaries on Sunday.

Former Prime Minister Francois Fillon, a socially conservative free-marketeer, won the run-off, setting up a likely showdown next year with far-right leader Marine Le Pen that the pollsters expect him to win.

Gold XAU= bounced back to $1,192.0 per ounce from Friday's low $1,171.5, which was its lowest level since early February.

The yield on 10-year U.S. Treasuries US10YT=RR dropped almost 5 basis points to 2.323 percent, off its 16-month high of 2.417 percent touched on Thursday.

On the other hand, some commodities gained sharply on hopes of strong demand for property and infrastructure investment in China and the United States.

Chinese steel futures SRBcv1 jumped over 6 percent, while iron ore futures DCIOcv1 also gained about six percent and zinc CMZN3, used to galvanize steel, powered to a nine-year high on the London Metal Exchange.

(Editing by Simon Cameron-Moore)

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