(Updates prices before European open)

* Brent holds above $100/bbl on more shipping disruptions

* Japan's Nikkei slides nearly 3%, South Korea down almost

5%

* Markets see one-in-three chance of Fed rate hike next week

* Yen languishing at 40-year lows as dollar gains

By Stella Qiu

SYDNEY, July 24 (Reuters) - Asian shares sank on Friday as a

near 40% rise in oil prices this month due to the intensifying

conflict in the Gulf revived inflation fears, rattling bond

markets and stoking rate hike expectations globally.

European bourses, however, are headed for a steady open after

losses a day earlier. Nasdaq futures slipped 0.3% as

bumper results from Intel ( INTC ) offered little support in the

face of broader worries about oil and rates, while investors

grew increasingly uneasy about how much cash the AI boom is

burning.

Brent crude slipped 0.4% to $100.3 a barrel, after

surging 7% overnight to a two-month high of $102. Attacks by

Iran-aligned Houthis on Saudi tankers in the Red Sea risk

choking off a second crucial Middle East artery for global oil

supplies, alongside Iran's near-closure of the Strait of

Hormuz.

President Donald Trump threatened "major military punishment"

for Iran and its Houthi allies, with the U.S. military striking

Iran late Thursday and early Friday in the 13th consecutive

night of attacks.

"Two of the world's busiest shipping corridors are under

threat in the same month, and markets are only just beginning to

work out what that means," said Nigel Green, CEO of deVere

Group, a financial advisory firm.

"With that ceasefire now collapsed and oil back above $100,

the drop which gave the Fed room to relax may already be

reversing ... This looks less like a short-lived spike and more

like a genuine reopening of the inflation question."

News that the U.S. administration will impose higher tariffs on

goods from 60 trading partners also did not help the inflation

picture, with 30-year Treasury yields marching towards their

highest levels since 2007 and benchmark European borrowing costs

climbing to highs last seen in 2011.

Markets bet central banks will have to turn more hawkish,

with a one-in-three chance of a rate hike from the Federal

Reserve as soon as next week - a sea change from merely a week

ago - while a move in September is more than fully priced in.

The European Central Bank left rates unchanged overnight but a

September rate hike is about 70% priced in.

In Asia, MSCI's broadest index of Asia-Pacific shares

outside Japan dived 2.3%, trimming this week's

gain to 0.7%. Japan's Nikkei slid 2.8%, also heading for

a weekly rise of 0.7%.

South Korea's KOSPI tumbled 4.8% and was set for a

fifth straight week of declines with a 1% drop. Hong Kong's Hang

Seng index fell 1.1%.

Adding to the gloom, Alphabet and Tesla,

the first two of the so-called "Magnificent Seven" megacap tech

companies to report this season, spooked investors as both

burned through cash in their most recent quarter for their big

spending on AI infrastructure.

Tesla shares tumbled around 14% on Wall Street after it

posted its first cash burn in two years. Alphabet fell

about 7%, with the Google parent also burning through cash as it

ramped up AI spending.

DOLLAR CATCHING YIELD SUPPORT

In bond markets, the benchmark 10-year U.S. yield

hit an over 18-month high of 4.7035%, having climbed

nearly 17 basis points this week. The yield on 30-year bonds was

steady at 5.17%, not far from a 19-year peak of 5.201%.

Higher Treasury yields helped the U.S. dollar, with the

dollar index holding at 101.40 after a 0.3% rise

overnight to the highest level this month.

The beleaguered yen was pinned near 40-year lows at 163.82 per

dollar, drawing a warning from the U.S. Treasury that

excess volatility in the currency was undesirable.

Japan's finance minister has repeatedly issued verbal

warnings about a possible intervention in the currency market,

after carrying out yen-buying operations in April and May, with

the yen weakening beyond the 160 level.

Precious metals took a hit, with gold off 0.5% at

$4,027 an ounce after falling 2% overnight. Silver

slipped 0.2% at $57.51 an ounce after a decline of 3.4%

overnight.

(Reporting by Stella Qiu; Editing by Sonali Paul and Lincoln

Feast.)