* Commodity currencies benefit from OPEC output cut deal
* But questions remain on how to cut production
* Dollar/yen up 0.6 pct on risk asset rally
* Euro little changed, eyes on German inflation
By Hideyuki Sano
TOKYO, Sept 29 (Reuters) - Commodity-linked currencies held firm on Thursday after OPEC agreed to cut oil output in the first such deal since 2008, boosting oil prices while a broad gain in risk assets dented the yen.
The Organization of the Petroleum Exporting Countries said it would reduce output to a range of 32.5-33.0 million barrels per day, a reduction of 0.7-2.2 percent from OPEC estimates of its current output at 33.24 million bpd.
That lifted oil prices, with international benchmark Brent futures posting their biggest gains in 2 1/2 months to a three-week high of $48.96 per barrel.
“It was a surprise that OPEC reached an agreement. It was even more surprising that they agreed on a production cut,” said Kazushige Kaida, head of forex at State Street in Tokyo.
Reflecting oil’s status as Canada’s leading export product, the Canadian dollar climbed to C$1.3054 versus the greenback after having risen 0.9 percent on Wednesday, its biggest daily gain in a month.
The Norwegian crown was a clear winner, hitting a near five-month high of 8.0222 to the dollar and 14-month high of 9.0085 per euro.
The Australian dollar also hit a three-week high of $0.7696, as the country exports various natural resources even though it is a net importer of oil.
Some analysts cautioned that the oil-cut deal is leaving crucial details on how much each country will produce to be decided at the next formal OPEC meeting in November, when an invitation to join cuts could also be extended to non-OPEC countries such as Russia.
“It could be that everyone is thinking that they don’t have to cut output themselves,” said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.
“I think the markets are still not fully convinced,” he added.
Still, a jump in oil prices boosted risk assets and undermined the yen, which is often seen as a safe haven at times of economic stress.
The dollar rose 0.7 percent to 101.35 yen, extending its rebound from one-month low of 100.085 touched on Tuesday.
But its rise was blocked for now by technical resistance from the Ichimoku tenkan line at 101.44. Many market players think dollar/yen is still firmly in the downtrend seen since the start of year.
The dollar has weakened against the yen as investors grew increasingly sceptical of the Bank of Japan’s ability to ease policy and cheapen the yen, with many seeing its stimulus measures having reached their effective limit.
In addition, traders suspect Washington will be less tolerant of a cheaper yen given the U.S. presidential election in November.
“While the recovery in oil prices was positive for risk-taking, there remain other worries, so safe-haven demand for the yen will remain,” said State Street’s Kaida.
The euro was little changed at $1.1222, recovering from Wednesday’s low of $1.1182 helped in part by rebound in shares of Deutsche Bank.
The euro is trading near the middle of its narrow triangle holding pattern since August.
In the short term, German inflation data could help the euro if the data shows a rise in consumer prices as expected, said Masafumi Yamamoto, chief FX strategist at Mizuho Securities.
German annual inflation is expected to reach 0.5 percent in September from 0.3 percent in August.
“German inflation has been recovering after hitting a bottom of minus 0.3 percent in April. If we see a number in line with market expectations, that could dampen expectations of further momentary easing by the European Central Bank in December,” he said. (Reporting by Hideyuki Sano; Editing by Shri Navaratnam and Eric Meijer)