Updates throughout at 0850 GMT

By Amanda Cooper

LONDON, Sept 13 (Reuters) -The dollar fell on Friday to its lowest this year against the yen and gold hit a record high after a dramatic overnight shift in investor expectations for a super-sized Federal Reserve interest rate cut next week.

Stocks, Treasury prices and commodities all rallied after traders raised the chances of a half-point cut from the Fed next week to 41%, from closer to 14% a day ago, before articles in the Financial Times and Wall Street Journal each called the decision "a close call".

Influential former New York Fed President Bill Dudley later said at a forum in Singapore "there's a strong case for 50."

"I've been firmly in the 25-basis point camp until now. This is actually making me think they might go 50," City Index market strategist Fiona Cincotta said.

"It feels like a coin toss now, that is what the market showing, given the reactions we're seeing in bonds, the yen, the U.S. dollar and gold," she said.

The dollar dropped as much as 0.97% to 140.415 yen JPY=EBS, its weakest since last Dec. 28.

The yen has also been supported this week by hawkish comments from Bank of Japan officials, with policy board member Naoki Tamura saying on Thursday he was "worried that upside inflation risk was heightening."

The dollar index =USD, which measures the currency against the yen and five other major rivals, dropped to a one-week trough at 101.00.

Benchmark 10-year Treasuries US10YT=RR rallied, pushing yields down 4 basis points to 3.638%, while rate-sensitive two-year yields US2YT=RR dropped 6.3 bps to 3.585%.

Commonwealth Bank of Australia strategist Carol Kong says current pricing for Federal Open Market Committee (FOMC) easing is too high.

"We continue to favour a 25 bp cut over a 50 bp cut, because the labour market and the broader economy remains resilient," she wrote in a note.

"Current market pricing is aggressive compared to the average FOMC rate cutting cycle outside of recessions. We, along with the consensus of U.S. economists, do not expect the U.S. economy to enter a recession."

Global shares .MIWD00000PUS rose for a fifth day, up 0.2%, thanks to gains in Europe, where the STOXX 600 .STOXX rallied 0.4%, heading for a weekly gain of 2.6%, the most in a month.

The euro EUR=EBS rose 0.13% to $1.1087, building on Thursday's 0.57% advance after European Central Bank President Christine Lagarde pushed back on prospects of a rate cut in October, following a widely expected quarter-point reduction on Thursday.

Gold XAU= headed for its strongest weekly gain since mid-August, up 2.8% to a record high of $2,570, driven by dollar weakness.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rallied 0.53%.

Japan, mainland China and South Korea are heading into long weekends, with Tokyo back on Tuesday, China on Wednesday and South Korea not until Thursday.

U.S. stock futures EScv1 added 0.1%, following gains on Thursday for the cash indexes.

Crude oil continued to climb after surging around 2% overnight, as producers assessed the impact on output after Hurricane Francine tore through the Gulf of Mexico.

U.S. West Texas Intermediate crude futures CLc1 rose 0.51% to $69.32 a barrel, extending Thursday's 2.5% rally. Brent crude futures LCOc1 rose 0.5% to $72.30, after a 1.9% jump the previous day.

Additional reporting by Kevin Buckland in Tokyo; Editing by Sam Holmes, Shri Navaratnam, Kim Coghill and Timothy Heritage

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