* Japan's Nikkei rallies 1.5%, South Korea turns 0.6% lower

* Wall St futures edge up, European stock futures up 1%

* Bonds take a beating, 10-year JGB yield hits 30-year high

(Updates prices before European open)

By Stella Qiu

SYDNEY, July 9 (Reuters) - Asian shares wobbled on Thursday

as a rally in semiconductors lost momentum, while oil prices

surged as a resumption of hostilities in the Gulf reignited

inflation fears and hammered bonds.

Oil prices rose for a third straight session as the U.S.

military completed another round of strikes against Iran.

President Donald Trump said on Wednesday the interim agreement

with Iran to end the war was "over", although he later said he

did not expect a return to a full-fledged war, helping soothe

concerns.

Brent crude futures rose 1% to $78.85 a barrel and

were up 9% this week to cross above $80 a barrel for the first

time since June 22.

That knocked global bond markets and boosted bets that the

Federal Reserve will have to raise interest rates this year to

tame inflation, with Fed funds futures now implying 38 basis

points of policy tightening this year, back to where they were a

week ago.

Wall Street initially fell on Trump's comments but climbed

off session lows, with the Nasdaq eking out a small gain of

0.2%. Chip giant Nvidia ( NVDA ) rallied 3.6% after media

reports that China plans to allow its top AI firms to buy a

limited number of the company's H200 chips.

European bourses looked set for a higher open, with

pan-region stock futures up 1%. Wall Street futures

were about 0.2% higher.

MSCI's broadest index of Asia-Pacific shares outside Japan

reversed earlier gains and were last off 0.5% as

the rally in chipmakers faltered, while Japan's Nikkei

climbed 1.3% to break a three-day losing streak.

South Korea's KOSPI rallied as much as 4% before

turning 1% lower as gains in Samsung and SK Hynix

faded.

"At this stage, the market still appears skewed towards the

view that the (Iran) conflict ultimately de-escalates, and

negotiations resume around the memorandum of understanding,"

said Chris Weston, head of research at Pepperstone.

"Nevertheless, traders understand the need to remain

open-minded. The situation remains highly fluid, and conviction

around timing is exceptionally difficult."

Minutes released by the Fed showed concern about mounting

inflation among policymakers. A few participants said there was

already a case to raise borrowing costs, before ultimately

agreeing with their colleagues to hold rates steady last month.

The global bond rout deepened in Asia. The yield on 10-year

Japanese government bonds hit 2.9%, the highest

since 1996, while Australia's 10-year government bond yields

scaled a one-month peak of 4.933%.

The benchmark 10-year U.S. Treasury yields

climbed 1 basis point to 4.5772% on Thursday after rising 4 bps

overnight. They are up 10 bps so far this week.

The reaction in the currency markets was rather muted, with

the dollar failing to hold on to its yield support and last down

0.1% to 162.41 yen. That was not far from 40-year

peaks of 162.84 as speculators remain wary of Japanese

intervention.

The euro edged up 0.1% to $1.1426, while sterling

held at $1.3396, just below a three-week peak of $1.341.

Gold slipped 0.2% at $4,067 an ounce.