* Hopes for Strait of Hormuz breakthrough fade

* Yen tiptoes into intervention red zone

* Cryptos sink; AI stocks rally

(Updates prices to Asia afternoon)

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 the 160 yen barrier as fresh hostilities flared in

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

Brent crude futures rose 1% to $94.74 a barrel. The

dollar hit 160 yen, then paused as traders became wary of

potential Japanese intervention around that level.

S&P 500 futures were flat and European futures

slipped 0.1%, although the AI bull run pushed on

unimpeded in Asia, where stock indexes climbed to record highs

in Taiwan and Japan. South Korean markets were closed.

The U.S. military said Iranian missile attacks on Bahrain,

Kuwait and other regional targets were either thwarted or failed

as diplomacy between Washington and Tehran made little headway.

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 anything.

"Last week ... the 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 tumbled, weighed by selling at big bitcoin

holder Strategy and talk that some investors were

selling to free up cash for next week's SpaceX listing.

Bitcoin is down nearly 10% in three sessions and hit a

two-month low of $66,123 on Wednesday.

SpaceX plans to raise $75 billion in a blockbuster initial

public offering, according to a source familiar with the

matter.

In the tech space, the artificial intelligence theme seems

impervious to war worries and Wall Street stock indexes eked

small gains on Tuesday, 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.

AI gains have lifted tech investor SoftBank above

Toyota ( TM ) as Japan's most valuable company and on

Wednesday memory manufacturer Kioxia ( KXHCF ) briefly pushed the

carmaker, which topped the list for decades, into third place.

US LABOUR DATA IN FOCUS

Bonds, which had rallied through Tuesday, were steady 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 and private payrolls figures are 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.