* Tech selloff resumes as markets eye US inflation data

* Fresh attacks in Middle East saps sentiment

* Dollar steadies keeping yen at 160 and traders on edge

By Ankur Banerjee

SINGAPORE, June 10 (Reuters) - Asian stocks fell on

Wednesday while oil prices surged as escalating tensions in the

Middle East unsettled markets, dimming hopes for an end to the

months-long war that has pushed commodities higher and stoked

inflation worries.

The United States launched strikes against Iran after

President Donald Trump said Tehran had shot down a U.S. Apache

helicopter in the Strait of Hormuz, leaving investors on edge

over a fragile ceasefire between all sides.

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

dropped 0.6%. Japan's Nikkei fell 0.9%

while the tech-heavy South Korean KOSPI slumped 2% in a

volatile week where AI stocks have come under pressure.

Oil prices climbed about 1% in early trade, moving away from

a seven-week low touched in the previous session in the wake of

the fresh U.S. attacks. Brent futures rose 0.9% to

$92.29 a barrel, while U.S. West Texas Intermediate WTI

crude climbed 0.8% to $88.97.

"Geopolitics is being treated as a headline risk, not a

macro shock for now," said Charu Chanana, chief investment

strategist at Saxo in Singapore.

"Oil holding around $90 despite fresh Iran headlines

suggests markets are not pricing a sustained supply disruption.

That leaves room for a bigger repricing if energy

infrastructure, shipping routes or U.S. involvement escalate."

U.S. stocks overnight slid as a tech rebound fizzled, with

AI valuation worries, Middle East tensions and rising rate bets

driving investors from risk.

INFLATION TEST AWAITS

Investor focus will be on the U.S. inflation data later on

Wednesday to gauge the impact of the war, with a Reuters survey

of economists predicting that inflation likely increased 4.2% in

the 12 months through May in what would be the largest annual

rise in the CPI since April 2023.

A stronger-than-expected jobs report on Friday increased

bets that the Federal Reserve will hike interest rates this

year. Traders have now fully priced in a 25-basis-point hike in

December versus expectations of two rate cuts before the war.

"If CPI today is hot, it will be much harder for the Fed to

sound relaxed next week," said Saxo's Chanana. "The Fed probably

cannot hike aggressively into a pure supply shock, but it also

cannot ignore inflation expectations if oil keeps rising."

The euro was at $1.1537 while sterling fetched

$1.337 as the U.S. dollar held firm. The yen changed

hands at 160.38 per dollar, near the 160 level widely seen as a

line in the sand for potential official intervention.

Japan's wholesale inflation accelerated in May at the

fastest pace in three years as price pressures from the war

broadened, data showed on Wednesday, adding to the case for

further interest rate hikes by the Bank of Japan.

A rate hike from the BOJ at the June 16 policy meeting is

now almost fully priced in, with analysts saying persistent

weakness in the yen and a hawkish shift from the Fed could

compel the BOJ to accelerate its own rate hikes.

"The market can usually absorb geopolitical noise rather

well when energy prices stay contained," said Anthony

Saglimbene, chief market strategist at Ameriprise.

"It has less room for comfort when oil prices, inflation

data, and Fed policy all lean in a direction that becomes less

supportive of stocks over the near term. This is the risk we see

building in the market right now."

That risk is being felt in emerging markets where Bank

Indonesia on Wednesday increased interest rates in a surprise

off-cycle meeting to prop up the fragile rupiah just

weeks after BI surprised markets with a jumbo hike.

.