(Updates with close of U.S. markets, oil settlement prices)
* Dollar hits lowest level vs yen since Oct. 2014
* European shares led lower by German factory orders decline
* Allergan (NYSE:AGN_pa) tumbles on Wall St with deal in jeopardy
By Chuck Mikolajczak
NEW YORK, April 5 (Reuters) - The dollar fell on Tuesday to
touch its weakest level against the yen since October 2014 and
stock markets worldwide slumped as economic data out of Europe
and the United States prompted 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 1.4 percent, on
target for its worst day since early February.
In New York, shares of Dublin-based Allergan 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 nearly 15 percent, their biggest
percentage drop in nearly 12 years, and were the worst performer
on the S&P 500. Pfizer shares rose 2.1 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 mix of global growth being perhaps a bit slower and a
more gradual path for the U.S. fed funds rate... are likely
positive for the yen," said Brian Daingerfield, currency
strategist for RBS (LON:RBS) Securities in Stamford, Connecticut.
The Dow Jones industrial average .DJI fell 133.68 points,
or 0.75 percent, to 17,603.32, the S&P 500 .SPX lost 20.96
points, or 1.01 percent, to 2,045.17 and the Nasdaq Composite
.IXIC dropped 47.86 points, or 0.98 percent, to 4,843.93.
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.
Fed Chair Janet Yellen said just last week the U.S. central
bank would proceed cautiously in raising rates. Those remarks
were viewed as dovish and sent U.S. stocks to their highest
levels of the year so far.
The dollar fell as low as 109.94 against the yen JPY= and
was last down 0.87 percent at 110.34 yen.
Oil steadied after Kuwait said an output freeze by major oil
producers would proceed without Iran. Brent crude LCOc1 gained
18 cents to settle at $37.87 a barrel, while U.S. crude CLc1
settled up 19 cents at $35.89 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, after hitting a session low of
1.717 percent.
Gold, another perceived safe haven and a top-performing
asset in the first three months of 2016, rose 1.2 percent to
$1,229.61 an ounce.