(Updates prices)

*

Nikkei hits all-time high, yen slumps after policy dove

elected

ruling party head

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Bitcoin, gold jump as traders snap up alternative assets

amid US

government shutdown

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Oil rises in relief rally after OPEC+ increases output by

less

than expected

By Kevin Buckland

TOKYO, Oct 6 (Reuters) - Japanese stocks surged more

than 5% to an all-time high while the yen skidded on Monday

after fiscal and monetary dove Sanae Takaichi was elected as

leader of the ruling party, putting her on course to become the

nation's first female prime minister.

Gold climbed to a record peak close to $4,000, while leading

cryptocurrency bitcoin rallied to a lifetime high on Sunday,

with investors increasingly turning to alternative assets as a

store of value as the U.S. government shutdown frayed nerves.

Japan's Nikkei soared above 48,000 for the first

time ever after Takaichi bested the more moderate Shinjiro

Koizumi in the Liberal Democratic Party's leadership vote on

Saturday, stoking expectations for fiscal stimulus.

The yen slumped as much as 2% to beyond 150 per U.S. dollar

for the first time since August 1, and slid as much as

1.8% to an all-time low versus the euro at 176.25.

Worries about Japan's finances sent the yield on 30-year

government bonds to an all-time high.

At the same time, short-dated Japanese government bond

yields slid to a two-week low as traders pared

bets on when the Bank of Japan will resume raising interest

rates.

Market-implied odds of a BOJ hike by year-end fell to 41%

from 68% on Friday.

A year ago, Takaichi criticized the BOJ's decision to raise

rates as "stupid", although her recent rhetoric has been more

restrained, saying only that central bank policy should be

aligned with the government.

"We believe concerns among some investors that the next

administration might pursue extreme fiscal expansion or exert

political pressure on the BOJ are overblown," Morgan Stanley

MUFG Securities economists wrote in a research report, noting

that Takaichi's stance "appears closely aligned" with BOJ

Governor Kazuo Ueda's "cautious approach" to policy

normalization.

Most other major share markets around the region were closed

for holidays, including mainland China, South Korea and Taiwan.

Hong Kong's Hang Seng declined 0.7%, ahead of a

holiday on Tuesday. Australia's benchmark eased 0.1%,

though trading was thinned by holidays in several states

including New South Wales and Queensland.

U.S. S&P 500 futures pointed 0.3% higher, after the

cash index rose to a record high on Friday.

Pan-European STOXX 50 futures were flat, with

stocks perched at record highs.

The U.S. dollar made up some ground on European currencies,

capitalizing on its momentum against the yen to rebound from

last week's 0.5% decline against a basket of major peers.

The euro lost 0.26% to $1.1714, and sterling

slipped 0.22% to $1.3440.

Gold last changed hands around $3,927 after advancing

as much as 1.5% earlier to a record just above $3,944.

Bitcoin traded around $123,600 following its jump to

$125,653.32 on Sunday.

"The shutdown matters this time around," said Geoffrey

Kendrick, head of digital assets research at Standard Chartered

Bank.

"This year, bitcoin has traded with 'U.S. government risks,'

as best shown by its relationship to (the) U.S. Treasury term

premium," he added.

"I suspect bitcoin will rise throughout the shutdown," and

will soon reach $135,000, Kendrick predicted.

Oil prices rose after OPEC+ announced on Sunday it would

increase production by 137,000 barrels per day (bpd) from

November, the same modest monthly increase as in October, amid

persistent concerns over a looming supply glut.

In the run-up to the meeting, sources said Russia was

advocating for an output increase of 137,000 bpd to avoid

pressuring prices, but Saudi Arabia would have preferred double,

triple or even quadruple that figure to regain market share more

quickly.

Brent crude futures gained 1.3% to $65.36 a barrel,

while U.S. West Texas Intermediate crude was at $61.69,

also a 1.3% advance.