* Global shares on track for biggest 1-day fall in 4 weeks
* Oil falls sharply on demand, economic worries
* Yen up as investors unwind carry trades; dollar down (Updates prices)
By Wanfeng Zhou
NEW YORK, April 12 (Reuters) - Oil prices dropped sharply for a second day on Tuesday, and helped drag stock prices down around the world, after Goldman Sachs warned that crude prices had gotten ahead of fundamentals and were set to fall.
Oil traded in New York is down over 7.0 percent in two days as Goldman Sachs predicted Brent prices will fall back to $105 in "coming months", down from $120 on Tuesday, and after the International Energy Agency said high prices could be eroding demand.
World stocks, as measured by the MSCI's main world equity index <.MIWD00000PUS> were last down 1.3 percent, the index's biggest one-day decline in four weeks.
Worries over global growth were heightened after Japan's economic minister warned damage wrought by last month's earthquake and tsunami could be worse than initially thought for the world's third largest economy. [ID:nL3E7FC092]
Japan's move to put the severity of radiation leakage at its stricken Fukushima nuclear plant on a par with the worst nuclear disaster at Chernobyl also weighed on sentiment.[ID:nL3E7FB2TZ]
"The market is increasingly becoming concerned about the situation in Japan and that high oil prices and high commodity prices will eventually hurt economic growth," said Mark Bronzo, money manager at Security Global Investors in Irvington, New York.
U.S. stocks also fell after disappointing revenues from
aluminum maker Alcoa Inc
The Dow Jones industrial average <.DJI> was last down 121.39 points, or 0.98 percent, at 12,259.79. The Standard & Poor's 500 Index <.SPX> was down 11.95 points, or 0.90 percent, at 1,312.51. The Nasdaq Composite Index <.IXIC> was down 27.58 points, or 0.99 percent, at 2,744.01.
Brent crude oil
Societe Generale also said rising gasoline prices in the U.S. were fueling a debate about "demand destruction" in the world's top economy. "Geopolitics (are) still critical. But with prices high, markets may be having doubts on demand," SocGen said.
The FTSEurofirst 300 index <.FTEU3> of top European shares slipped 1.7 percent, with miners and energy firms among the heaviest losers. Emerging markets <.MSCIEF>, which count several resource exporters in their ranks, fell 1.9 percent.
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SAFE-HAVEN DEMAND
The yen and Swiss franc rose as jittery investors sold riskier trades funded by borrowing in the two low-yielding currencies.
"Our positioning data shows some carry trades are pretty extended," said Chris Walker, currency strategist at UBS.
The yen firmed to a 1-1/2 week high versus the U.S. dollar
The euro rose to a fresh 15-month high against the dollar above $1.45, boosted by reported buying from China and news the world's second largest economy was willing to purchase more Spanish debt.
Dovish comments from key U.S. Federal Reserve officials weighed on dollar sentiment. Two of the Fed's most powerful officials, Janet Yellen and William Dudley, said the U.S. central bank should stick to its super-easy monetary policy as inflation was not a threat and unemployment remains too high. [ID:nN11296347]
The U.S. dollar index <.DXY>, which tracks the greenback against a basket of major currencies, was down 0.5 percent at 74.754, after hitting 74.704, its lowest since December 2009. (Additional reporting by Angela Moon and Gertrude Chavez-Dreyfuss in New York and Sebastian Tong in London; Editing by Chris Sanders)