* 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

(Updates prices)

By Tom Westbrook

SINGAPORE, May 8 (Reuters) - Oil prices were higher on

Friday and stocks a little bit lower 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 has

swept up chipmakers.

Benchmark Brent crude futures were up 1.3% at

$101.60 a barrel and European stock futures fell 0.7%.

The United States and Iran exchanged fire on Thursday in the

most serious test yet of their month-long ceasefire, but Iran

said the situation had returned to normal while the U.S. said it

did not want to escalate. President Donald Trump said the

ceasefire, which has more or less held for a month, was still in

effect, sustaining hopes for a negotiated resolution.

Stock markets in Asia, which have been soaring thanks to

gains in chipmakers and other AI-linked stocks, slipped only

slightly from record highs.

MSCI's broadest index of Asian shares outside Japan

fell 0.8%, as did South Korea's KOSPI

though the latter was still headed for a weekly gain of more

than 12% - the largest since 2008 - as Samsung and

SK Hynix have surged.

Taiwan's benchmark is up 6.9% this week and Japan's Nikkei

4.5%.

"Despite ongoing hostilities and still-elevated oil prices,

markets are pricing a limited duration," said Marija Veitmane,

head of equity research at State Street Markets, with Asia and

the U.S. attracting the most buying at Europe's expense.

The Nikkei was 0.4% lower through Friday morning, dragged by

a fall in SoftBank shares after Arm Holdings,

where it is majority owner, warned of trouble securing supply

for its new artificial intelligence chip.

S&P 500 futures rose 0.2%.

Currency markets were broadly steady with the dollar

recovering from recent lows and the yen in focus as Japan has

likely been intervening to stave off further falls.

The euro bought $1.1731, the Aussie $0.7210

and the yen was at 156.9 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.

Sterling was last steady around $1.36.

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 $79,460.