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

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

4%

* 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 fell on Friday as

oil prices stormed back above $100 a barrel amid an intensifying

conflict in the Gulf, rattling bond markets and reviving fears

of a fresh inflation shock.

Brent crude held at $100.85 a barrel, after surging

7% overnight to a two-month high of $102 as attacks by

Iran-aligned Houthis on Saudi tankers in the Red Sea choked off

a second crucial Middle East artery for global oil supplies,

alongside Iran's near-closure of the Strait of Hormuz.

Two weeks since the effective collapse of an interim truce

meant to end the war, the U.S. military launched air strikes on

Iran into Friday morning while Tehran fired at neighbouring Arab

countries that host U.S. bases. With the conflict showing little

signs of abating, Brent has soared nearly 40% this month alone.

"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 nearing 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 fell 1% and Japan's Nikkei

slid 2.9%. South Korea's KOSPI dropped 3.7%.

Nasdaq futures were last up 0.1% as bumper results

from Intel ( INTC ) offered only fleeting support in the face of

broader worries about oil and rates.

Wall Street fell overnight after 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.

DOLLAR CATCHING YIELD SUPPORT

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

held at 4.7013% on Friday, after hitting an over

18-month high of 4.7030% overnight. 30-year bond yields were

steady at 5.17%, just below a 19-year peak of 5.201%.

The higher Treasury yields helped the U.S. dollar up

generally, with the dollar index holding at 101.46 after

a 0.3% rise overnight to the highest level this month.

The beleaguered yen was pinned near 40-year lows at 163.89

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.

"Against the backdrop of surging energy prices, the hawkish

Fed repricing, and the yen's loss of safe-haven status, any

comments from Japanese officials today about being ready to

intervene or faster BoJ rate hike will likely be ignored," said

Tony Sycamore, an analyst at IG.

"At this point, trying to support the yen here would be akin

to standing in the way of a bullet train."

Precious metals took a hit, with gold off 0.1% at

$4,043 an ounce after falling 2% overnight. Silver held

at $57.45 an ounce after a decline of 3.4% overnight.