* Oil jumps after Western forces strike Libya again
* Progress seen at Japan nuclear plants lifts stocks
* Deutsche Telekom soars on proposed deal with AT&T
* Euro rises on rate hike expectations (Adds U.S. market open, updates prices, adds byline, New York dateline)
By Rodrigo Campos and Mike Peacock
NEW YORK/LONDON, March 21 (Reuters) - Stocks rose across the globe on Monday as risk appetite returned following progress in solving Japan's nuclear crisis while the yen slid on speculation of more central bank intervention.
Oil prices also gained after Western forces launched a second wave of air strikes on Libya.
U.S. stocks rose more than 1 percent as investors welcomed
AT&T's
Deutsche Telekom AG
The pan-European FTSEurofirst 300 <.FTEU3> index of top shares was up 1.7 percent at 1345 GMT. and the MSCI world share index <.MIWD00000PUS> jumped 1.4 percent, taking it back into positive territory for the year to date.
The Dow Jones industrial average <.DJI> was up 197.53 points, or 1.67 percent, at 12,056.05. The Standard & Poor's 500 Index <.SPX> gained 19.06 points, or 1.49 percent, at 1,298.26. The Nasdaq Composite Index <.IXIC> added 46.19 points, or 1.75 percent, at 2,689.86.
Engineers rigged power cables to all six reactors at Japan's Fukushima complex and started a water pump at one of them to reverse the overheating that has triggered the world's worst nuclear crisis in 25 years. For details, see [ID:nL3E7EK08V]
"The market hates uncertainty and the issues in Japan are easing, which is helping," said Colin McLean, managing director at fund group SVM Asset Management in Edinburgh, which has 700 million euros assets under management.
The yen added to losses, with speculators wary of more coordinated action by the Group of Seven countries after their first joint intervention. [FRX/]
The euro briefly rose above $1.42 against the U.S. dollar for the first time since November, as markets braced for a euro zone interest rate hike as soon as next month.
Brent crude for May
Oil traders will remain on edge after unrest also flared in Syria and Yemen in the wake of popular uprisings that toppled long-time leaders in Tunisia and Egypt earlier this year and a crackdown on protests in Bahrain last week.
Oil has risen nearly 22 percent this quarter and the social unrest in North Africa and the oil-producing Gulf provide enough uncertainty to keep prices buoyed.
"The key is really how Saudi (Arabia) and Iran play out. Cool heads need to prevail. It's contained at the moment, but if things worsen, you see a Mideast premium very quickly," said Jonathan Barratt, managing director of Commodity Broking Services.
U.S. Treasuries prices extended losses after the Treasury said it will wind down the remaining $142 billion of its agency-guaranteed mortgage-backed portfolio.
Benchmark 10-year notes
Libya Graphics http://r.reuters.com/ser58r
Japan disaster Top News page [nTOPNOW4]
Picture, graphic packages: http://r.reuters.com/wyb58r
YEN SLIDES
The dollar rose 0.5 percent from late U.S. trade on Friday
to 81.13 yen
The G7 acted after the yen jumped to a post-World War Two record high of 76.25 yen to the dollar last Thursday. More is expected to come if it climbs again.
"Dollar/yen will be supported in the near term with the market wary of more intervention," said Hans-Guenter Redeker, chief fx strategist at BNP Paribas.
"The central banks have drawn a line in the sand and it has made a psychological impact on the markets which are unlikely to take dollar/yen down to 76.25 yen again in the short term."
Japan's benchmark Nikkei share average <.N225> plunged 10 percent last week as engineers battled to prevent a meltdown and radiation leak at a nuclear power plant crippled by an earthquake and tsunami that devastated a swathe of the country.
Japan's markets were closed for a holiday on Monday but the MSCI index of Asian stocks outside of Japan <.MIAPJ0000PUS> rose 1.4 percent.
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http://blogs.reuters.com/hedgehub (Additional reporting by Wanfeng Zhou, Angela Moon, Karen Brettell, Ian Chua, Joanne Frearson, Blaise Robinson, Alejandro Barbajosa and Anirban Nag)