SINGAPORE, May 12 (Reuters) - Oil crept higher and the

dollar rose on Tuesday as hopes faded for a deal to get ships

moving through the Strait of Hormuz, while a red-hot chip rally

in chip stocks cooled and traders waited on U.S. inflation

figures.

U.S. President Donald Trump said the ceasefire with Iran was

"on life support" after Tehran's response to a U.S. proposal to

end the war made clear the two sides were still far apart.

Brent crude futures were up 0.7% to $105 a barrel.

S&P 500 futures dipped 0.2% and even the almost

unstoppable KOSPI index in Seoul slid 3%, pulling down

other regional markets.

MSCI's broadest index of Asian shares excluding Japan

fell 1%, while Tokyo's Nikkei was flat.

European futures fell 1%.

Markets are keeping a watchful eye on Trump's Wednesday

visit to China, with expectations low for either progress on

Iran or on the trade front, with the focus on the status quo

holding.

"Investors should not expect sweeping agreements. A 'win'

would mean no new tariffs or export controls, and perhaps

small symbolic deals, such as agricultural

purchases, aircraft orders, or signals on rare earths," said

Daniel Casali, chief investment strategist at Evelyn Partners.

"These may seem minor, but stability at the margin matters."

Overnight Wall Street had been resilient in the face of

rising oil prices with the S&P 500 and Nasdaq

eking out the latest in a series of new closing highs.

U.S. inflation data is due later in the day with the

headline consumer price index seen climbing to a hot 3.7%

year-on-year.

Any suggestion that the Federal Reserve may need to hike

this year - rather than cut as investors had expected before the

war - could rattle markets.

Global bond yields rose overnight, led by a selloff in gilts

after a speech by Prime Minister Keir Starmer did little to

dispel investor doubts about his political survival, following

Labour's heavy defeat in last week's local elections.

Japan's 10-year government bond yield rose to a

29-year high of 2.54% ahead of an auction later in the day. A

summary of opinions from the Bank of Japan's April meeting

reinforced a growing hawkish shift on the board, keeping the

door open for a June rate hike.

Benchmark 10-year Treasury yields were steady

at 4.42%.

In currency trade the dollar was on the front foot and rose

to 157.53 yen. U.S. Treasury Secretary Scott Bessent is

in Tokyo for meetings with top Japanese officials, but his

Japanese counterpart made no explicit mention of his endorsement

for Japan's currency intervention to reporters on Tuesday.

"We agreed that we are coordinating extremely well on recent

market moves, including exchange rates," said Japanese Finance

Minister Satsuki Katayama.

The euro slipped 0.2% to $1.1762 and the Australian

dollar fell 0.25% to $0.7232. Australia's government is

set to deliver a narrower than previously flagged budget deficit

on Tuesday.