* Brent hovers near $100/barrel on renewed Mideast

hostilities

* Taiwan, Japan, South Korea markets have strong weekly

gains

* Yen hovering around 157; markets on edge for

intervention

* US jobs data comes into focus

(Updates for early European afternoon trading)

By Samuel Indyk and Tom Westbrook

LONDON, May 8 (Reuters) - Oil edged higher and stocks

slipped on Friday after the U.S. and Iran exchanged fire in the

Middle East, though many equity markets - particularly in Asia -

remained on track for strong weekly gains on booming AI demand.

Benchmark Brent crude futures rose about 0.5% to

$100.50 a barrel, while European stocks fell 0.6% and

U.S. stock futures gained 0.5%.

Traders were also watching losses for Britain's ruling

Labour Party in local elections, which could pressure Prime

Minister Keir Starmer, though sterling inched up and UK assets

broadly tracked European peers as results trickled in.

MIDDLE EAST CLASHES

The U.S. and Iran exchanged fire in the Gulf and the UAE

came under renewed attack, testing a month-long ceasefire. Both

sides played down the situation, leaving investors uncertain.

"The market seems to be taking every chance to price in a

quick end to the war," said Jan von Gerich, chief analyst at

Nordea.

"But it seems unlikely there's going to be an agreement. I

still think there are going to be disruptions in the Strait (of

Hormuz) for a longer time and it won't be resolved any time

soon."

European stocks were lower. The pan-continental STOXX 600

was down 0.6%, while major bourses in Frankfurt

and Paris were off about 0.9%.

Asian equities slipped from recent highs but remained on

track for a robust week, supported by strong revenue and

spending plans from U.S. AI hyperscalers, which have boosted

regional chipmakers.

MSCI's broadest index of Asian shares outside Japan

fell 0.9%, although South Korea's KOSPI

inched up 0.1%, bringing its weekly gain to more than 13.5% -

its largest since 2008 - helped by rallies in Samsung

and SK Hynix.

Taiwan's benchmark was up 7% this week and Japan's Nikkei

rose 5.4%. Europe's STOXX 600 was heading for a 0.2%

weekly rise, while the S&P 500 and Nasdaq were up

1.5% and 3%, respectively.

DOLLAR INCHES LOWER

The dollar edged lower and was set for a second straight

weekly decline, while the yen remained in focus after Japan

intervened in currency markets in early May to stem its slide,

a source familiar with the matter told Reuters.

The dollar was last down 0.1% to 156.77 yen, and was

headed for a second weekly fall against Japan's currency. Gains

beyond 155 have proved difficult to sustain following suspected

intervention totalling nearly $70 billion since last Thursday.

The euro last bought $1.1767, while China's yuan

, Asia's best-performing currency since the war broke

out, hovered near 6.8 per dollar, close to its strongest since

2023.

U.S. JOBS AND UK ELECTIONS IN FOCUS

Investors are awaiting Friday's U.S. nonfarm payrolls

report, with economists expecting 62,000 jobs to have been added

in April after a 178,000 increase in March, a Reuters survey

shows.

"The labour market is still holding up reasonably well,"

Nordea's von Gerich said.

"Since the focus is on the Middle East and the impact comes

via inflation more than growth, especially in the U.S., maybe

the payrolls report is not quite as crucial as it has been

sometimes in the past."

Local election results across Britain showed heavy early

losses for Labour, although Starmer said he would not resign.

"Gilts are already under scrutiny due to inflation risks,

and adding political uncertainty to the mix could further push

(global) investors to look elsewhere," said ING analysts.

Britain's 10-year gilt yield was down 3.5 basis

points at 4.91%, although remained close to a three-decade high.

TARIFFS

A U.S. trade court ruled President Donald Trump's latest 10%

temporary global duties are unjustified under a 1970s trade law.

But analysts expect a swift appeal and little overall impact on

U.S. levies.

Treasury yields tracked crude prices higher on Thursday as

traders worried about inflation, but did not move much more on

Friday, with the benchmark 10-year yield at 4.38%.

Bitcoin was drifting towards a sixth weekly gain in a

row at $80,265.