* Safety trades unwound after Turkey coup bid crushed
* Oil prices fall but hold above Friday's lows
* SoftBank deal to buy ARM buoys European stocks
* Wall Street set to open higher
* Asia shares gain, house price data hits China
By Nigel Stephenson
LONDON, July 18 (Reuters) - The dollar strengthened againstthe yen on Monday as investors unwound safety trades after afailed coup in Turkey, while SoftBank Group's $32 billion dealto buy British chip designer ARM Holdings lifted Europeanequities.
U.S. stock index futures were up, indicatingWall Street would open higher after closing flat on Friday.
Turkish shares fell 4.8 percent but the lira, which hit a three-week low against the dollar onFriday as news of the coup attempt broke, rose nearly 2 percentas authorities widened a purge of the armed forces andjudiciary.
Investors had initially bought safe-haven assets such as theyen, gold and U.S. Treasuries on reports of the coup but thesetrades were largely reversed on Monday.
The yen fell 0.7 percent to 105.60 per dollar and theeuro rose 0.1 percent to $1.1046.
"The scenario looks a bit calmer now ... so we're back tothinking about the sort of policy outlook that had the yenfalling against the dollar last week," said Jeremy Stretch, headof currency strategy at CIBC in London.
Gold fell 0.8 percent to about $1,326 per ounce oninvestors' revived appetite for risky assets, having earlierfallen as low as $1,323.70 in Asian trade.
Crude oil, which dipped as the Turkish army said on Fridayit had seized control in a country bordering Syria, Iraq andIran, fell again on Monday. Brent crude, theinternational benchmark, was down 46 cents at $47.15 a barrelbut above Friday's low of $46.65.
European shares gave up most early gains but were stillslightly higher on the day, led by a surge of almost 45 percentin ARM Holdings. SoftBank will pay 17 pounds a sharefor ARM - a premium of more than 40 percent to Friday's closingprice.
ARM traded at 1,694 pence, up 43 percent. Japaneseshares were closed for a holiday.
"An increase in inbound M&A was one of the obviousconsequences of Brexit and weakened sterling but few expected itto manifest itself so quickly or at so large a scale," DanRidsdale, analyst at Edison Investment Research, said in a note.
Tour operators Thomas Cook and Tui fell 1.5and 2.2 percent respectively, as analysts saw the Turkish coupattempt potentially reducing demand for travel there.
The pan-European STOXX 600 index was up 0.2percent. The Euro STOXX volatility index, broadly aEuropean equivalent of the U.S. VIX "fear gauge", edged up 2percent on Monday but was still near its lowest for seven weeks.
Phoebus Theologites, co-founder of multi-fund investmentcompany SteppenWolf Capital, said this reflected, among otherthings, a perception that any negative impact of Britain's voteto leave the European Union would not be apparent immediately.
For Reuters new Live Markets blog on European and UK stockmarkets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
MONETARY EASING
MSCI's broadest index of Asia-Pacific shares outside Japan added 0.2 percent, having reached its highest inalmost nine months last week. Australia rose 0.5percent. Chinese shares fell, led lower by real estateand construction shares after data showed growth in house pricesslowed last month.
Yields on U.S. Treasuries, which were also in demand onFriday as the Turkish coup bid unfolded, fell again. Ten-yearyields stood at 1.57 percent, down 2.6 basispoints.
German 10-year yields, the euro zone benchmarkfor borrowing costs, fell 2.7 basis points to minus 0.09percent.
Core government bond yields have been falling across thedeveloped world, with many turning negative, in anticipation ofmonetary easing to help ignite weak growth and inflation.
The European Central Bank meets this week and while nochange is expected this time, further steps are seen likely inSeptember.
Investors also expect easier policy from the Bank of Japanand the Bank of England while markets price in little chance ofany hike in U.S. interest rates this year. (Additional reporting by Wayne Cole in Sydney, Patrick Grahamand Sudip Kar-Gupta in London; Editing by Dale Hudson and JohnStonestreet)
