GLOBAL MARKETS: Middle East tensions push oil to $100 a barrel, Asia stocks subdued

TOKYO - Brent crude rallied towards $100 per barrel on Wednesday, keeping the mood in Asian stock markets subdued, as attacks intensified in the Middle East, stoking inflation worries ahead of the release of closely watched U.S. consumer price data.

The yen strengthened towards the nearly seven-month high touched against the dollar on Tuesday as traders exited short positions in the Japanese currency amid expectations for faster Bank of Japan interest rate hikes and a potential rush of repatriation of Japanese capital.

The euro edged higher ahead of the European Central Bank's policy decision on Thursday, with markets widely expecting a hike amid inflationary pressures from the Iran war.

Iranian-backed Houthis in Yemen launched strikes on several Saudi cities on Tuesday, further embroiling a U.S. ally in the conflict, while U.S. forces hit multiple Iranian oil tankers and Iran struck a U.S. base in Jordan.

Oil prices jumped for a fourth straight session on Wednesday, gaining more than $1 in early trade.

Brent crude futures LCOc1 rose $1.57 to $99.49 a barrel, the highest level since late June. U.S. West Texas Intermediate crude CLc1 was at $94.63 a barrel, up $1.60.

Stocks in Sydney .AXJO slipped around 0.3%, while Hong Kong's Hang Seng .HSI dropped 0.6% and mainland Chinese blue chips .CSI300 edged up 0.2%.

A rebound in chip and AI stocks helped some other regional benchmarks though, with Japan's Nikkei .N225 up 0.6% following Tuesday's 1.7% tumble. South Korea's KOSPI .KS11 jumped 1.6% and Taiwan's TAIEX .TWII rose 0.6%.

Japanese cable makers surged after Verizon and Corning signed adeal on high-density optical fibre.

Overnight, the Philadelphia SE semiconductor index .SOX jumped 1.3%, despite declines on Wall Street's three main indexes.

U.S. S&P 500 futures EScv1 added 0.1%, after the cash index .SPX sank 0.6% on Tuesday.

"Across several of the major macro markets, we see indecision in the price action -- tight ranges and a general holding/consolidation pattern," Chris Weston, head of research at Pepperstone, wrote in a client note.

Brent crude is currently "one of the clearest real-time signals for sentiment" for the overall market, and $100 "now feels like a highly achievable level," he said.

Inflation worries have weighed on global equities in recent weeks and lifted bond yields as traders price higher odds for central bank tightening.

U.S. CPI data is due on Friday.

Traders assign close to even odds for a quarter-point hike or a hold from the U.S. Federal Reserve on Wednesday of next week, while being all but certain of a quarter-point increase from the BOJ two days later.

The yen strengthened around 0.2% to 153.66 per dollar JPY=, edging back towards its high of 152.89 from the previous session. It had surged around 4% over the last five sessions, with hawkish comments from BOJ officials ostensibly initiating a move that then snowballed as breaks of key levels triggered additional buying, market players said.

The ECB is all but certain to raise euro zone rates by a quarter point on Thursday.

The euro EUR= added 0.1% to $1.1629, putting it in the middle of its tight range of the past three weeks.

Sterling GBP= was little changed at $1.3545, with the Bank of England due to announce its latest policy decision on Thursday of next week, with economists predicting the key rate will be on hold for the remainder of this year.

The Aussie AUD= rose 0.1% to $0.7222.

Bitcoin BTC= drifted higher to change hands at $78,680.60.

Gold XAU= gained 0.3% to around $4,368 an ounce.

-Reporting by Kevin Buckland; Editing by Kate Mayberry/ Reuters