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* Brent tumbles nearly 10% after reaching a four-year

high

* ECB and BoE both hold rates in Europe

* Dollar and global bond yields drop

* Apple ( AAPL ) results due later on Thursday on Wall Street

By Marc Jones

LONDON, April 30 (Reuters) - Oil prices retreated after

hitting a four-year high and global bond yields fell in a

dramatic day on markets as the ECB and Bank of England kept

rates steady on Thursday, while the yen surged following talk of

foreign exchange intervention.

European markets performed a U-turn in a breathless session,

with earnings from iPhone maker Apple ( AAPL ) yet to come and President

Donald Trump set to be briefed by the leader of the U.S. Central

Command on plans for potential military action against Iran.

Benchmark Brent crude futures had surged to $126

overnight on concerns that renewed U.S. attacks on Iran could

choke oil supplies for months but had tumbled to $113 a

barrel by the time the European Central Bank held its rates at

2%.

The yen rose by over 3% against the dollar following

stark warnings from Tokyo officials, including the finance

minister, that intervention to prop up the currency could be

imminent.

It pushed the dollar down 2.1% to below 157 yen, putting the

U.S. currency on track for its biggest one-day drop against the

yen since last August, when it fell 2.25%.

Japanese Finance Minister Satsuki Katayama had said earlier

that the timing to take "decisive action" in the market was

nearing, in her strongest signal yet of potential currency

intervention to prop up the sagging currency.

Rate-sensitive 2-year UK Gilt yields fell over 10 basis

points as the BoE kept interest rates at 3.75% in a resounding

8-1 vote that dampened expectations that it might have been

tempted to hike.

"This shock will induce a trade-off between higher inflation

and softer output, and the appropriate policy response is state

contingent," BoE Governor Andrew Bailey said, referring to the

Iran war-related spike in oil prices.

ECB chief Christine Lagarde delivered a similar message,

saying there was "insufficient information" and that the bank's

next meeting in six weeks would be "the right time to assess the

development."

There had also been a hawkish shift in tone from the U.S.

Federal Reserve as it left rates on hold on Wednesday that had

triggered a selloff in the bond markets - which in tandem with

the oil price, was only now reversing.

The 2-year UK gilt yields were back below 4.5%,

while 2-year German yields - which are sensitive to

near-term ECB rate changes - looked set to snap an eight-day run

on gains.

AXIOS SAYS TRUMP TO BE BRIEFED

AXA's chief economist, Gilles Moec, said everything centred on

worries about the U.S.-Israeli war against Iran.

News site Axios quoted unspecified sources as saying Trump

would on Thursday receive a briefing from CENTCOM commander

​Brad Cooper, on new plans for potential military action against

Iran.

Negotiations have stalled and Axios said Washington hopes

⁠to make Iran more flexible at the negotiating table on nuclear

issues.

"The inflation shock is significant and probably going to

last longer than expected and at the same time the damage to the

economy is going to be higher," Moec said.

"This is playing into the hands of the hawks," he said,

referring to central bankers calling for higher interest rates

to prevent further inflationary problems.

The day's swing in oil prices was over 10 percentage points.

Brent was last at $113.5 a barrel and down almost 4% having been

as high as $126.41 overnight. It is still nearly double the

price it started the year at.

The rally in Japan's yen came after it had

breached the key 160 threshold and the yield on 10-year Japanese

government bonds had climbed to 2.5%, the highest

since June 1997.

EYES ON APPLE

Wall Street opened higher with investors gearing up for

earnings from iPhone maker Apple ( AAPL ) later as part of what

has already been a frenetic week of 'Big Tech' reports.

Google parent Alphabet's shares had leapt 7% in

extended Wall Street trading on Wednesday after it beat

forecasts. Microsoft ( MSFT ) and Amazon's ( AMZN ) were also

solid although Facebook and Instagram owner Meta

tumbled 7% on its plans to plough billions more into AI and

datacentres.

Attention was also still on the rates market, especially

after Wednesday's shift in tone at the Fed.

Three of the U.S. central bank's board members voted to drop

the easing bias in its policy statement in the most divided

decision since 1992.

Outgoing Chair Jerome Powell confirmed he would stay on as a

governor for now to defend the institution's independence as his

successor Kevin Warsh, picked by low-rate advocate U.S.

President Donald Trump, moves toward confirmation.