(Updates with European markets close, changes byline)
* Dollar falls more than 1 pct vs yen
* European shares led lower by German factory orders decline
* German Bund yields back below 0.10 pct after factory data
By Chuck Mikolajczak
NEW YORK, April 5 (Reuters) - The dollar fell on Tuesday to
its weakest level against the yen since October 2014 and stock
markets worldwide slumped as economic data out of Europe and the
United States fueled a retreat from riskier assets.
The Japanese currency, often sought in times of market
turmoil or economic uncertainty, strengthened. Bank of Japan
Governor Haruhiko Kuroda, speaking to parliament on Tuesday,
stressed his readiness to expand monetary policy, such as
pushing interest rates further into negative territory.
Wall Street followed declines across Europe and Asia. The
MSCI All-World Index .MIWD00000PUS dropped 1.3 percent,
putting it on target for its worst day since Feb. 11.
In New York, shares of Dublin-based Allergan (NYSE:AGN_pa) AGN.N were
hammered after the U.S. Treasury Department on Monday unveiled
rules designed to curb corporate tax inversion mergers that
could possibly stymie the company's tie-up with New York-based
Pfizer Inc (NYSE:PFE) PFE.N . A source told Reuters that Pfizer was
leaning toward abandoning, not altering, the deal.
Allergan shares slumped 15 percent and were the worst
performer on the S&P 500 .SPX while Pfizer shares gained 3.2
percent.
The U.S. trade deficit widened more than expected in
February in the latest indication that economic growth weakened
further in the first quarter, although other data suggested the
economic growth picture could improve in the months ahead.
The Dow Jones industrial average .DJI fell 100.19 points,
or 0.56 percent, to 17,636.81, the S&P 500 .SPX lost 18.48
points, or 0.89 percent, to 2,047.65, and the Nasdaq Composite
.IXIC dropped 40.24 points, or 0.82 percent, to 4,851.56.
In Europe, the FTSEurofirst 300 share index .FTEU3 dropped
1.9 percent. Germany's DAX index .GDAXI slid 2.6 percent after
data showed industrial orders in Germany, Europe's largest
economy, unexpectedly fell 2.1 percent in February.
Further muddying the waters for investors, two senior
officials of the U.S. Federal Reserve said the market's views of
when the central bank would raise interest rates may be too
pessimistic.
Just a week ago, Fed Chair Janet Yellen said the U.S.
central bank would proceed cautiously in raising rates. Those
remarks were viewed as dovish and drove U.S. stocks to their
highest levels for the year so far.
The dollar fell 1 percent against the yen JPY= and last
traded at 110.21 yen. The euro EUR= fell 0.2 percent to
$1.1372.
Oil steadied after Kuwait said an output freeze by major oil
producers would proceed without Iran, shoring up sentiment ahead
of weekly data likely to show another record high in U.S. crude
inventories.
Brent crude LCOc1 slipped 3 cents to $37.66 a barrel,
while U.S. crude CLc1 lost 11 cents to $35.59 a barrel.
Yields on low-risk government bonds fell. German 10-year
yields DE10YT=RR , the benchmark for euro zone borrowing costs,
fell as far as 0.08 percent, the lowest level in almost a year.
Benchmark U.S. 10-year notes US10YT=RR were last up 16/32
in price to yield 1.7235 percent, down from 1.779 percent on
Monday.
Gold, another perceived safe haven and a top-performing
asset in the first three months of 2016, rose more than 1.2
percent at $1,229.56 an ounce.