* Financials lead Wall Street higher
* European stocks touch highest level since Dec. 2015
* U.S. Treasury yields fall ahead of Yellen testimony (Updates with U.S. market open; changes byline, dateline)
By Chuck Mikolajczak
NEW YORK, Feb 13 (Reuters) - A gauge of global equity markets advanced on Monday and bond yields rose, lifted by a reemergence of assets likely to benefit from reflationary policies that are expected to be implemented by U.S. President Donald Trump.
Financials .SPSY and banks in particular led equities on Wall Street higher as investors bet Trump's tax reform plans and softer regulatory environment will boost economic growth and corporate profits.
"It's interesting and it's very important that the financials are on the leading edge of the reflation trade," said Peter Kenny, senior market strategist at Global Markets Advisory Group, in New York.
"If you look at the financials, the primary reason we are seeing outperformance on their part, that speaks directly to the Trump reflation trade."
Investors were also encouraged by the two-day U.S.-Japan summit held over the weekend apparently having ended smoothly without President Donald Trump talking tough on trade, currency or security issues. Dow Jones Industrial Average .DJI rose 125.57 points, or 0.62 percent, to 20,394.94, the S&P 500 .SPX gained 10.34 points, or 0.45 percent, to 2,326.44 and the Nasdaq Composite .IXIC added 28.61 points, or 0.5 percent, to 5,762.73.
MSCI's all-country world index .MIWD00000PUS advanced 0.46 percent and was on track for its fourth straight advance. Europe's broad FTSEurofirst 300 index .FTEU3 gained 0.9 percent after hitting its highest level since December 2015.
U.S. Treasury yields rose as investors looked ahead to testimony by Federal Reserve Chair Janet Yellen on Tuesday and Wednesday when the Fed Chair gives her semiannual Humphrey Hawkins testimony before lawmakers in Washington. 10-year notes US10YT=RR were last down 10/32 in price to yield 2.4448 percent, up from 2.41 percent late on Friday.
The dollar .DXY also moved to a near three-week high against a basket of major currencies on expectations the reflationary policies would stoke economic growth and the possibility the Fed could be more aggressive in hiking interest rates. from Trump on Thursday that he plans to announce what he said would be the most ambitious tax reform plan since the Reagan era in the next few weeks rekindled hopes for big tax cuts. commodities, copper CMCU3 hit its highest levels since May 2015 after shipments were shut off from the world's two biggest copper mines - due to a strike in Chile and an export's ban by Indonesia. last traded at $6,102 per tonne, up 0.2 percent on the day after climbing as high as $6,204. On Friday it jumped more than 4 percent, its biggest one-day rise in almost four years.
Oil prices dipped slightly after strong gains on Friday in the wake of an OPEC report showing high compliance by members in a production cut while signs of rising U.S. crude output continued to weigh on prices. benchmark Brent crude futures LCOc1 fell 1.9 percent LCOc1 to $56.65 per barrel and U.S. crude CLc1 lost 1.6 percent to $52.98.
(Editing by Bernadette Baum)