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30-year British gilt yield at highest since 1998

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French 30-year OAT yield highest since 2011

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Pound and yen both under pressure

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Gold hits record high before retreating

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US labour market in focus before Fed's policy meeting

(Updates with morning European trading)

By Alun John and Ankur Banerjee

LONDON/SINGAPORE, Sept 2 (Reuters) -

Long-dated bond yields in Britain and France hit their

highest in over a decade on Tuesday as investors grow

increasingly worried about the state of finances in countries

around the world, while gold touched a fresh record high.

As markets suffered a sharp back-to-school shock, the

Japanese yen also tumbled after a close aide to Prime Minister

Shigeru Ishiba said on Tuesday he would resign from his post.

Later in the day, U.S. business activity data will be the first

in a raft of important economic figures to come this week.

Britain's 30-year bond yield rose nearly 6 basis points

to 5.697%, its highest since 1998, while France's rose a similar

amount to 4.513%, its highest since 2009.

Bond yields move inversely to prices, and yields

especially on super-long-dated 30-year bonds have been

soaring around the world

, with investors concerned about the scale of debt in

countries from Japan to the United States.

But Britain and France are in particular focus.

French Prime Minister Francois Bayrou looks set to lose

a

confidence vote next week

as opposition parties balk at his cuts to government

spending, while

British finance minister Rachel Reeves

is expected to raise taxes in her autumn budget in order to

remain in line with her fiscal targets.

Sterling also tumbled sharply, down over 1% on the

dollar at $1.3402, and at its weakest in nearly a month on the

euro.

"Thirty-year yields at their highest in almost three

decades are not a good look for (Britain's) Labour government,

and underscore that there is little fiscal or economic

credibility left," said Neil Wilson, UK investor strategist at

Saxo Bank.

"But it wasn't just the UK in isolation here ... the

thing to consider here is that global long-end bonds are in

trouble as no one wants to wear duration - this is seeing gold

breach a fresh record."

Gold rose as high as $3,508.5 an ounce early on

Tuesday, its highest on record, while silver rose to a 14-year

high.