(Updates prices)

* Brent tops $100/barrel on renewed Mideast hostilities

* Taiwan, Japan, S. Korea set for strong weekly gains

* Yen hovering around 157; markets on edge for

intervention

By Tom Westbrook

SINGAPORE, May 8 (Reuters) - Oil prices rose and stocks

slipped as the U.S. and Iran exchanged fire in the Middle East,

though many markets in Asia were still heading for stellar

weekly gains as AI demand swept up chipmakers.

Benchmark Brent crude futures were up about 1% to $101 a

barrel in the Asia day, while European stock futures

were down 0.8%. FTSE futures fell 0.7%, while S&P 500

futures rose 0.3%.

Traders had a wary eye on Labour Party losses in British

elections, which could pressure Prime Minister Keir Starmer's

leadership, though sterling stayed steady at $1.3575.

The United States and Iran clashed in the Gulf and the UAE came

under renewed attack in a test of a month-long ceasefire, but

the warring parties downplayed the situation to leave investors

hopeful of a resolution.

"The focus has still been on the strength of the earnings

coming out of the U.S.," said Kerry Craig, global market

strategist at J.P. Morgan Asset Management.

He said markets were also encouraged by efforts from both

camps to reach a temporary deal to allow traffic through the

Strait of Hormuz while they discuss a fuller peace settlement.

Stock markets in Asia, which have been soaring thanks to

strong revenues and spending plans from the U.S. AI hyperscalers

- which means rivers of gold for the region's chipmakers -

slipped relatively slightly from record highs.

MSCI's broadest index of Asian shares outside Japan

fell 0.9%, with South Korea's KOSPI down

just 0.1% and set for a weekly gain of more than 13% - the

largest since 2008 - on the back of a surge in Samsung

and SK Hynix.

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

rose 5.2%.

Currency markets were broadly steady with the dollar recovering

from recent lows and the yen in focus. Japan intervened in the

foreign exchange market during holidays in early May to stave

off further falls in the battered currency, a source familiar

with the matter told Reuters.

The euro bought $1.1736, the Aussie $0.7221

and the yen was at 156.8 per dollar having struggled to

sustain gains beyond 155 after surges on suspected intervention

to the tune of nearly $70 billion since last Thursday.

China's yuan, Asia's best-performing currency

since the war broke out, is on the cusp of strengthening past

6.8 to the dollar and sits near its strongest since 2023.

U.S. JOBS AND UK ELECTIONS IN FOCUS

Investors are awaiting the U.S. non-farm payrolls report on

Friday, with jobs expected to have increased in April by 62,000

after rebounding 178,000 in March, a Reuters survey of

economists shows.

Local government elections across Britain are also in the

frame. Poor results for the ruling Labour Party are expected and

if that puts Prime Minister Keir Starmer's leadership in doubt,

investors worry that the gilt market could be under pressure.

"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.

A U.S. trade court ruled Trump's latest 10% temporary global

duties are unjustified under a 1970s trade law. But analysts

expect a swift appeal and little overall impact to U.S. levies.

Treasury yields had tracked crude prices higher through

Thursday as traders worried about inflation, but did not move

much more on Friday with the benchmark 10-year yield

at 4.39%.

Australian 10-year yields jumped six basis

points to 4.99%. Bitcoin was drifting towards a sixth

weekly gain in a row at $79,680.

(Reporting by Tom Westbrook; Editing by Kim Coghill and Lincoln

Feast.)