* Hopes for Strait of Hormuz breakthrough fade

* Yen tiptoes into intervention red zone

* Cryptos sink; AI stocks rally

By Tom Westbrook

SINGAPORE, June 3 (Reuters) - Oil prices rose for a

third day running on Wednesday and the dollar was on the brink

of breaking above 160 yen as fresh hostilities flared in the

Gulf after U.S.-Iran peace talks stalled.

U.S. crude futures jumped around 2% to $95.40 a

barrel. The dollar hit 160 yen, then paused as traders

became wary of potential Japanese intervention around that

level.

S&P 500 futures dipped, although the AI bull run

pushed on in Asia, where stock indexes climbed to record highs

in Taiwan and Japan. South Korean markets were closed.

U.S. Central Command said Iran fired missiles at Kuwait and

Bahrain, which were thwarted or failed, prompting U.S. forces

hit back at Iran's Qeshm Island in the Strait of Hormuz.

Iran's Revolutionary Guards said it had attacked the U.S.

Fifth Fleet headquarters. Iran and the United States said last

week that they had reached a tentative deal to halt the war, but

the two sides have yet to sign off on any agreement.

"Last week ... trajectory was towards some sort of MOU and

markets were high on the belief that that was coming," said

Chris Weston, head of research at broker Pepperstone in

Melbourne.

"Things are looking more precarious (now). It does suggest

that people are coming back to the negotiating table with less

scope to get that done and I think we're seeing some of those

bets being unwound."

Cryptocurrencies were tumbling, with bitcoin now down

nearly 10% in three sessions to hit a two-month low of $66,123

on Wednesday.

Still, the artificial intelligence theme seems impervious to

war worries and Wall Street stock indexes eked small gains

overnight, led by AI.

Shares in Marvell Technology ( MRVL ) soared 32.5% to a

record high after Nvidia ( NVDA ) boss Jensen Huang called the

chipmaker the next trillion dollar company at the Computex week

in Taipei.

SpaceX plans to raise $75 billion in a blockbuster initial

public offering next week, by selling 555.6 million shares at a

target price of $135 per share, according to a source familiar

with the matter.

Bonds, which had rallied through Tuesday, were steady early

on Wednesday with the benchmark 10-year U.S. Treasury yield

at 4.46%.

Overnight data showed U.S. job openings increased by the

most in five years in April, pointing to a resilient job market

and offering little evidence the economy needs lower rates.

The U.S. services ISM is due later on Wednesday, ahead of

labour market data on Friday.

"In our view, the pickup in momentum across the U.S. economy

over early 2026 could see the U.S. jobs report exceed downbeat

consensus forecasts," Peter Dragicevich, Asia-Pacific currency

strategist at payments firm Corpay, said.

"If realised, we think this may bolster the view the U.S.

Fed could raise interest rates down the track, which in turn

might see the USD strengthen."

Markets, which had expected rate cuts before the Iran war,

have priced in about 18 basis points of U.S. rate increases this

year. A hike in Europe next week is all but fully priced in

following data showing inflation accelerated further last month,

while traders see about a 75% chance of a June rise in Japan.

Foreign exchange markets were broadly steady, with the euro

at $1.1627 and the dollar just shy of 160 yen at 159.86.

Australia's economy slowed in the March quarter, data

showed, as a boom in data centres boosted business investment

but also sucked in imports, though the currency held

steady at $0.7177.