Asia stocks down, yen slump keeps markets on intervention alert

SINGAPORE, June 27 (Reuters) - Asian shares fell and bond yields spiked on nervousness about inflation on Thursday, while the yen's slide past 160-per-dollar had currency traders bracing for Japan to step in and steady it.

The dollar made six-week highs on sterling and the kiwi and at 160.7 yen traded just shy of Thursday's 38-year peak. The jittery mood had frothy sectors of financial markets especially vulnerable and Nasdaq futures dropped 0.5%.

Shares in bellwether chipmaker Micron Technology (MU.O)New Tab, opens new tab slid 8% in U.S. after-hours trade as it met rather than topped lofty revenue expectations. Japan's Nikkei (.N225)New Tab, opens new tab fell 1%.

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS)New Tab, opens new tab was down 0.5%, with some of the largest losses in Australia (.AXJO)New Tab, opens new tab where rate sensitive stocks sank following Wednesday's data showing a surprise jump in inflation.

"Australia's inflation is broadly at the highest levels in the developed world now," said CommSec senior economist Ryan Felsman, with the market re-pricing risks of further hikes.

Australian three-year government bond yields had leapt 18 basis points on Wednesday, after inflation accelerated to a six-month high in May, and rose another 10 bps on Thursday to 4.21%, tracking an overnight sell-off in U.S. Treasuries.

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