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* Dollar firm after upbeat U.S. consumer confidence data
* Yield gap between U.S. Treasuries, Bunds at record high
* Crude oil holds gains, copper, iron ore buoyant
* London's FTSE plays catch-up as euro bourses drift
* Dow eyes another crack at 20,000 after 15 pct jump in 2016
By Marc Jones
LONDON, Dec 28 (Reuters) - The dollar, oil and world stocks rose on Wednesday following upbeat U.S. data that saw the gap between Treasuries and other benchmark global government bonds hit new highs.
Europe's main stock market, London's FTSE, reopened with a gain of 0.5 percent as it played catch-up after similar run-ups in Germany and France and as Wall Street's Dow Jones index eyed another crack at 20,000 points.
The dollar also drove higher after U.S. consumer confidence shot to its loftiest in more than 15 years in December on hopes that President-elect Donald Trump will nurture further improvements in the world's biggest economy.
Having already jumped 16 percent against the Japanese currency since the U.S. election, the greenback gained a further 0.2 percent to 117.65 yen. It was up a similar amount against the euro and sterling at $1.0390 per euro and $1.2213 to the pound.
"Everything is broadly dollar-supportive," said Societe Generale's head of currency strategy Kit Juckes.
"We have come back from Christmas with some good U.S. data, (U.S.) bond yields are at the top end of their recent range, oil is edging higher and the Dow is flirting with 20,000 points."
Euro zone bond yields fell across the board as concerns about the strength of a rescue plan for Italian banks and normal year-end caution pushed investors to the safety of government debt.
Germany's 10-year yields hit their lowest in seven weeks at 0.18 percent. That in turn widened the yield gap to U.S. Treasuries, which act as the world's benchmark borrowing rate, to a record high of 237 basis points.
Oil prices - the other major market driver in recent weeks - climbed back towards a 1-1/2-year high, as promised output cuts loomed.
Oil has surged more than 50 percent this year despite plunging to a 12-year low in January. Brent was at $56.50 a barrel and U.S. crude at $54.25 after an overnight gain of 1.7 percent.
In a sign that the world's major oil producers may abide by their output agreement, Iraqi Oil Minister Jabar Ali al-Luaibi said on Wednesday his country, which has seen fast production growth in the past two years, would cut supply by between 200,000 and 210,000 barrels per day from January.
Gazprom Neft also said it planned to boost oil output by less than it had intended before Russia joined the deal to cut supply.
Helped by the broadly robust tone to stock and commodity markets, the Australian dollar firmed.
Australian stocks gained 1 percent. Indonesian shares added 1.9 percent, while Japan's Nikkei rose 0.1 percent.
Shanghai dipped 0.3 percent to continue a dire 2016. It has slumped the best part of 18 percent this year, having been a star performer in 2015, dampening an otherwise strong rebound in emerging markets after three straight years of losses.
With the dollar and bond yields on the rise again and China's yuan on the slide, investors are wondering whether the rally could falter.
Data from Morgan Stanley showed EM equity funds logged weekly outflows of $3.35 billion, the second largest of the year, while EM bond funds saw outflows of $800 million, which made it seven straight weeks of outflows.
It said the cumulative drop in equity funds over the last eight weeks totalled $11.1 billion.
Gold dipped though firmer oil prices and the upbeat U.S. data continued to support the wider commodity market. Copper on the London Metal Exchange was up 1 percent at $5,513 a tonne as trading resumed after the Christmas holidays.
Iron ore on the Dalian Commodity Exchange extended gains after breaking a nine-day slump the previous day.
It was up 3.5 percent at 569.0 yuan ($81.82) per tonne and has now risen about 170 percent this year, boosted by expectations of Chinese stimulus and hopes that the incoming Trump administration will increase U.S. infrastructure spending.
"There is strong positive sentiment on the outlook for these industrial metals going into 2017," said a Perth-based commodities trader.
$1 = 6.9541 Chinese yuan Reporting by Marc Jones; Editing by John Stonestreet and Dale Hudson