(Updates prices, adds details and background)

By Kevin Buckland

TOKYO, April 19 (Reuters) - Asian shares and bond yields

sank on Friday while safe-haven currencies, gold and crude oil

jumped after reports of a sharp escalation in Middle East

hostilities.

MSCI's broadest index of Asia-Pacific shares

dived 2.3% and U.S. stock futures pointed 1.5% lower

following media reports Israeli missiles had hit a site in Iran.

U.S. long-term Treasury yields dropped as much

as 13.5 basis points to 4.512%. The safe-haven yen rallied about

0.4% against the dollar and 0.7% versus the euro

while the Swiss franc rallied about 0.9% versus the

dollar.

Gold jumped 1.3% to $2,409.45, heading back toward

last week's all-time high at $2,431.29.

"We've seen a massive risk-off move," said Khoon Goh,

head of Asia research at ANZ.

"Markets will be very worried that this is the start of a

tit-for-tat escalation, which could create huge volatility in

the Middle East."

Brent futures surged more than 3% on concerns Middle

East supply could be disrupted.

Bitcoin dropped as much as 6.2% to a 1-1/2-month low

of $59,590.74.

ABC News cited a U.S. official in reporting Israeli missiles

had hit a site in Iran, while Iran's Fars news agency said

explosions were heard at an airport in the city of Isafahan.

Israeli Prime Minister Benjamin Netanyahu had vowed

retaliation earlier this week after Iran launched hundreds of

drones and missiles in an unprecedented direct attack on Israel

over the weekend.

That, in turn, was in response to a suspected Israeli strike

on its embassy compound in Syria that killed senior Iranian

military commanders.

Japan's Nikkei slid 3.3%, while Taiwan's stock

benchmark skidded 3.8%. Hong Kong's Hang Seng

dropped 2%.

Equity markets were already heading lower before the Middle

East headlines, as more robust U.S. economic data spurred

additional Federal Reserve officials to signal no rush to lower

interest rates.

Chip-sector stocks were hit particularly hard by both the

outlook for protracted tight monetary policy and investor

disappointment at Taiwan Semiconductor Manufacturing Co's ( TSM )

decision to leave capital spending plans unchanged.

The stock slumped as much as 6.6%.

A day earlier, ASML, the largest supplier of

equipment to computer chip makers, reported lacklustre new

bookings.

"A triple whammy of sorts for the markets, as Fed's

hawkishness keeps taking a leg up with each passing day and

semiconductor earnings have so far fallen short," said Charu

Chanana, head of currency strategy at Saxo.

"To top it off, geopolitical risks have escalated

again...and risk sentiment could remain weak as we await more

details on damages and casualties."