* STOXX 600 down 0.2%, Wall St futures ease

* Dollar holds firm after spike in Treasury yields

* Yen hits fresh 40-year low; traders watch for intervention

* Oil edges up as US-Iran talks look deadlocked for now

(Updates after European markets open)

By Danilo Masoni and Wayne Cole

MILAN/SYDNEY, July 1 (Reuters) - World shares started the

third quarter cautiously on Wednesday ahead of key U.S. jobs

data, as uncertainty over U.S.-Iran negotiations weighed and

traders watched for possible Japanese intervention after the yen

hit fresh 40-year lows.

The MSCI World Price Index slipped 0.1% in

early European trade after posting its strongest quarter in

around six years, rising 13% on rallying chipmakers and tech

stocks.

Iran said on Tuesday it would not meet with top U.S. envoys

who had flown to the Middle East, with the two sides still far

apart on a framework that would fully open the vital Strait of

Hormuz shipping route.

Bond markets were under pressure after U.S. Treasury yields

spiked overnight ahead of crucial jobs figures on Thursday.

All eyes will be on Federal Reserve Chair Kevin Warsh when

he appears at a European Central Bank conference later in the

session for any guidance on the need for a tightening.

Warsh has long been against the Fed providing forward

guidance and may keep his policy cards close to his chest.

Futures imply a 33% chance of a Fed rate hike at its

meeting later this month, while the probability of a September

move is priced at 67% to 88%.

Europe's region-wide STOXX 600 index was down 0.2%

at 0750 GMT, steadying after a 10% quarterly rise that marked

its strongest performance since late 2020.

Falling oil prices after the Iran ceasefire have buoyed

European stocks in recent weeks, though investors doubt this

signals a move away from tech-driven U.S. and Asian markets.

"The second quarter GDP data isn't going to be great. But

clearly prospects of the Strait of Hormuz (opening) and lower

oil prices is a major positive factor for Europe," said Kevin

Thozet, member of the investment committee at Carmignac.

"Europe equities have also been a funder of AI trades, so

any weakness there is expected to be a relative tailwind too."

Japan's Nikkei gained 0.6% after surging 37% last

quarter, with strong tech demand lifting sentiment among big

manufacturers to an eight-year high and factory activity to its

strongest quarter since 2014.

South Korea's main index fell 2%, following a 68%

quarterly rally driven by AI-fuelled chip demand. The

semiconductor boom helped propel June exports to a record $100

billion, with the fastest growth in nearly 50 years.

S&P 500 and Nasdaq futures fell 0.4-0.5%.

A LOT RESTING ON EARNINGS

A pause in markets was understandable after Wall Street

posted its strongest quarter since 2020, driven by an 88% surge

in the Philadelphia Semiconductor Index.

"The historical record certainly favours the bulls," said

Pepperstone's Chris Weston, noting Nasdaq futures have recorded

only one negative July since 2008.

With earnings season starting in mid-July, investors are

banking on strong tech results to justify lofty valuations and

continued inflows into the sector.

Goldman Sachs ( GS ) noted the consensus is for earnings per share

to grow 22% from a year earlier, with AI infrastructure stocks

accounting for nearly 60% of that increase.

Yet higher Treasury yields, with the 10-year

last at 4.46%, up 4.3 basis points, and the risk of further

policy tightening could challenge equities.

The rise in yields helped lift the dollar to as high as

162.84 yen, a four-decade high.

The climb has drawn the usual threats of intervention from

Tokyo, though the authorities seem reluctant to act, having

spent almost 12 trillion yen ($74 billion) through April and May

to little lasting effect.

The euro was down 0.2% at $1.1398 ahead of euro

zone inflation data expected to show further cooling,

reinforcing expectations the European Central Bank is nearing

the end of its tightening cycle. Germany's 10-year bond yield

, the benchmark for the bloc, rose 2 bps to 2.934%.

Brent crude edged up 0.1% to $73.02 a barrel, far

below its May peak, while gold fell 0.9% to $3,970 an

ounce after a difficult quarter.

($1 = 162.6600 yen)