(Adds Asian, EU indices, updates prices)

* Nikkei leads Asia markets slide, Wall St futures dip

* Oil choppy as US and Iran trade threats, deadlines

* Yields climb as markets wager on global rate rises

By Wayne Cole

SYDNEY, March 23 (Reuters) - Share markets slid in Asia

on Monday while U.S. bond yields hit eight-month peaks as the

United States and Iran traded escalating threats and Israel

planned for "weeks" more fighting, sending oil prices on another

roller-coaster ride.

Iran said on Sunday it would strike the energy and water

systems of its Gulf neighbours if U.S. President Donald Trump

followed through with a threat to hit Iran's electricity grid in

48 hours, extinguishing any hope of an early end to the war, now

in its fourth week.

Trump warned Iran had 48 hours to open the vital Strait of

Hormuz, which is effectively closed for most vessels with little

prospect of naval protection for shipping.

Japan's Nikkei slid 3.9%, bringing losses for March

so far to over 13%. South Korea's market shed 4.5%,

making a 12% drop for the month. MSCI's broadest index of

Asia-Pacific shares outside Japan fell 1.2%.

Oil prices were again choppy with early gains quickly

fizzling out, leaving Brent down 0.2% at $111.90 a barrel, but

still up 55% on the month so far. U.S. crude was near

flat at $98.35.

"The war could still go on for many weeks yet and see oil

prices rise say to $150 a barrel," said Shane Oliver, head of

investment strategy at fund manager AMP. "And the steady

destruction of energy infrastructure means it will take longer

to get supply back to normal."

"It's also worth noting that past oil shocks unfolded over

many months in terms of the rise in oil prices as the full

impact became clearer - it was over about 4 months in 1973 and a

year in 1979."

Analysts at HSBC noted Singapore jet fuel was up 175% this

year to a multi-decade high, while Asian liquefied natural gas

had climbed 130%. Bunker fuel used in shipping had blown out,

raising the cost of transporting goods, while surging fertiliser

prices will make food more expensive.

SAY GOODBYE TO RATE CUTS

For Europe, EUROSTOXX 50 futures and DAX futures

both slid 1.2%. On Wall Street, S&P 500 futures

dipped 0.1%, while Nasdaq futures lost 0.2%.

The inflationary pulse from energy has seen markets abandon

hopes for further monetary easing globally and swing to pricing

in rate hikes across most developed nations.

Futures have wiped out expectations for 50 basis

points of easing from the Federal Reserve this year, with even a

small chance the next move could be up.

The hawkish sea change has hammered bonds and sent yields

climbing, adding to borrowing costs for many governments already

struggling with deficits and debt.

The prospect of higher costs and softer consumer demand has

clouded the outlook for corporate profits, while the jump in

yields made equity valuations look ever more stretched.

The energy shock, combined with pressure on fiscal budgets

from higher defence spending, saw double-digit increases in bond

yields globally last week.

Ten-year U.S. Treasury yields were at an

eight-month top of 4.4110%, having climbed a steep 44 basis

points since the war began.

The heightened volatility in markets has tended to benefit

the U.S. dollar as a store of liquidity. The U.S. is also a net

energy exporter, giving it a relative advantage over Europe and

much of Asia, which are net importers.

The euro was a shade lower at $1.1555, but some

way from major supports at $1.1409 and $1.1392.

The dollar was flat versus the yen at 159.15, just

off a 20-month top of 159.88, with investors wary in case a

break of 160.00 triggers intervention from Japan.

In commodity markets, gold was 0.4% firmer at $4,511 an

ounce, having lost ground last week as investors wager on

higher interest rates globally.

(Reporting by Wayne Cole; Editing by Lincoln Feast.)