* Global stock gauge paces to best day in 3 weeks
* Japan reiterates readiness to intervene on yen
* Oil up as supply disruptions offset stockpile worry
* Greek stock market hits 2016 high on prospect of debt relief (Updates with afternoon trading)
By Lewis Krauskopf
NEW YORK, May 10 (Reuters) - Stock markets around the world rallied on Tuesday, helped by solid corporate earnings reports and higher oil prices supporting energy shares, while the yen again retreated sharply against the dollar.
MSCI's broad gauge of global stocks .MIWD00000PUS climbed 1 percent, on track for its best session in three weeks. The three major U.S. indexes surged at least 1 percent and the pan-European FTSEurofirst 300 .FTEU3 index advanced 0.9 percent.
The yen fell against the dollar for a second day as a Japanese economic adviser reiterated that the country was prepared to intervene in currency markets. a basket of currencies, the dollar .DXY edged up 0.2 percent.
Equities globally benefited from investors' belief that the U.S. Federal Reserve is less likely to raise interest rates in June in light of recent weaker-than-expected economic data, said Peter Kenny, senior market strategist at Global Markets Advisory Group in Berkeley Heights, New Jersey.
"Markets are banking on an unchanged interest rate narrative, not only in June but for the foreseeable future, meaning certainly to the end of the summer," Kenny said.
The Dow Jones industrial average .DJI rose 196.69 points, or 1.11 percent, to 17,902.6, the S&P 500 .SPX gained 22.83 points, or 1.11 percent, to 2,081.52 and the Nasdaq Composite .IXIC added 51.12 points, or 1.08 percent, to 4,801.33.
The S&P 500 gained strength from Amazon AMZN.O , following a bullish analyst report, and Allergan (NYSE:AGN_pa) AGN.N , after the U.S. pharmaceutical company posted strong earnings. Results from Credit Suisse CSGN.S and jewelry maker Pandora PNDORA.CO helped the European index. shares .ATG hit 2016 highs after euro zone finance ministers offered to grant Greece some debt relief, causing Greek 10-year bond yields GR10YT=TWEB to fall below 8 percent for the first time since early December. benchmark Bovespa stock index .BVSP gained 2.5 percent and the country's currency jumped with impeachment proceedings against leftist President Dilma Rousseff back on track, fueling optimism that a new pro-market administration could take over on Thursday. yen slid 0.9 percent against the dollar as risk appetite improved for a second straight session, undermining traditional safe havens such as the Japanese currency.
"Risk appetite is naturally tied to the belief that we're in an ultra-low-yield environment and investment managers can't simply sit here," said Jeremy Cook, chief economist at payments company World First in London.
Repeated verbal warnings from Japan over the weekend and on Tuesday that it was prepared to step in to weaken the currency have also held off investors. prices jumped as supply disruptions of 2.5 million barrels per day in Canada and elsewhere offset concerns about growing record high U.S. crude stockpiles. crude CLc1 settled up 2.8 percent at $44.66 a barrel, while benchmark Brent crude LCOc1 settled up 4.3 percent at $45.52 a barrel. Oil prices have recovered some ground after touching 12-year lows earlier in 2016.
Benchmark 10-year Treasury notes US10YT=RR gained 2/32 in price to yield 1.7543 percent, down from 1.76 percent on Monday.