GLOBAL MARKETS-Stocks climb for fourth session, yen strengthens against dollar as intervention eyed

By Chuck Mikolajczak

NEW YORK, Jan 26 (Reuters) - Global stocks rose for a fourth straight session on Monday as investors braced for earnings from a host of U.S. megacaps while the yen strengthened against the dollar as investors remained on guard for any signs of intervention in the Japanese currency.

In addition, gold advanced to more than $5,100 an ounce for the first time, as a swath of geopolitical tensions continues to weigh on the U.S. dollar.

On Wall Street, U.S. stocks were higher in the early stages of trading, with the S&P 500 materials sector .SPLRCM among the best performers, as the rise in gold helped lift names such as Freeport-McMoRan FCX.N and Newmont Mining NEM.N. The materials sector has the second-highest earnings growth rate of any sector in the first quarter at 24.4%, according to LSEG data.

"As long as fiscal dominance, geopolitical fragmentation and central bank credibility remain in question, precious metals are likely to stay at the center of this perfect storm, not just as hedges, but as alternatives," said Daniela Hathorn, senior market analyst at Capital.com.

The Dow Jones Industrial Average .DJI rose 236.97 points, or 0.49%, to 49,340.05, the S&P 500 .SPX rose 37.38 points, or 0.54%, to 6,952.99 and the Nasdaq Composite .IXIC rose 123.77 points, or 0.53%, to 23,625.02.

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 7.27 points, or 0.70%, to 1,044.82 and was on track for a fourth straight session of gains, while the pan-European STOXX 600 .STOXX index rose 0.36%.

GOLD HITS RECORD HIGH

Spot gold XAU= rose 2.15% to $5,089.92 an ounce after hitting a high of $5,110.50. It is up nearly 18% for the month.

Markets are also expecting earnings this week from names such as Microsoft MSFT.O, Apple AAPL.O, Tesla TSLA.O and Meta Platforms META.O while the Federal Reserve is scheduled to release its policy statement on Wednesday.

The central bank is widely expected to keep rates unchanged, according to CME's FedWatch Tool, while investors will monitor comments from Fed Chair Jerome Powell for clues on the path of monetary policy.

The dollar index =USD, which measures the greenback against a basket of currencies, fell 0.24% to 96.99, with the euro EUR= up 0.42% at $1.1876. Sterling GBP= strengthened 0.4% to $1.3696.

Against the Japanese yen JPY=, the dollar weakened 1.23% to 153.80 after rising as much as 1.6%, to hit its lowest since mid-November at 153.30 yen, after sharp spikes in the Japanese currency on Friday sparked speculation over potential intervention. The New York Federal Reserve conducted rate checks on Friday, sources told Reuters.

Top Japanese authorities said on Monday they have been in close coordination with the United States on foreign exchange, which would mark the first coordinated intervention between the two countries in 15 years.

"While a cautiously hawkish stance from the (Fed) this week, along with resilient data could offer some support to the USD, any potential intervention in the yen market may worsen the already weak flow picture for the dollar," analysts at Barclays said in a note.

While markets will eye comments from Powell in the wake of the Fed policy statement, the meeting will likely be overshadowed by a Trump administration criminal investigation into the central bank chief, an evolving effort to fire Fed Governor Lisa Cook, and the coming nomination of a successor to take over for Powell in May.

The yield on the benchmark U.S. 10-year note US10YT=RR fell 3.6 basis points to 4.203%.

JAPAN'S FISCAL CHALLENGE

The yen has been under pressure since Sanae Takaichi took over as Japan's prime minister in October, in part due to concerns over Japan's government debt that stands at more than double its economic output. A historic rise in market interest rates has raised fears for Japan’s ability to service its debt, but Takaichi has said she will cut taxes as she campaigns for a snap election to be held on February 8.

BOJ money market data released on Monday suggested there had been no intervention on Friday.

U.S. President Donald Trump provided temporary relief to markets last week when he appeared to back down from threats to slap tariffs on European allies unless they let him take over Greenland.

However, with the prospect of more sanctions targeting Iran in the offing, geopolitics continues to have an impact on markets.

U.S. crude CLc1 fell 0.49% to $60.77 a barrel and Brent LCOc1 fell to $65.66 per barrel, down 0.33% on the day after climbing more than 2% in the previous session on output disruptions in U.S. crude-producing regions and tensions between the U.S. and Iran.