(Corrects release time of U.S. CPI data in third paragraph
to 1230 GMT from 1330 GMT)
* Inflation worries ahead of U.S. CPI data
* European stocks fall, Bund yields at nearly year high.
* Dollar stronger, boosting Japanese export stocks
* Euro weakens on indications of Irish EU "no" vote
By Jeremy Gaunt, European Investment Correspondent
LONDON, June 13 (Reuters) - Inflation concerns undermined
European stocks and lifted the dollar on Friday as financial
markets eyed key U.S. consumer price data due later in the day.
Euro zone government bond yields also rose to their highest
in nearly a year. Early signs that Irish voters may vote "no" to
a new European Union treaty also weakened the euro.
May's U.S. Consumer Price Index data, due at 1230 GMT, will
be more closely watched than usual following a series of
warnings from U.S. Federal Reserve officials about inflationary
pressures.
The warnings have prompted expectations of rate hikes by the
end of the year. Other central banks, including the European
Central Bank, have been similarly hawkish.
Also attracting attention was a Group of 8 finance ministers
meeting in Japan over the weekend, which could underpin some
recent strength in the dollar.
European stocks fell ahead of the U.S. data.
The FTSEurofirst 300 <> index of top European shares
was down 0.7 percent. It gained 0.9 percent on Thursday,
snapping a six-session losing run.
"Inflation is a major negative factor for equities, no
matter the source so any good news on either lower oil prices or
(macroeconomic) data would be a tremendous support," said Arthur
van Slooten, strategist at Societe Generale, in Paris.
Crude oil <Clc1> was down slightly in the day but still
above a heady $135 a barrel.
Earlier, Japan's Nikkei stock average <> rose 0.6
percent, primarily on the view that exporters would benefit from
a weaker yen if the dollar rises.
Still, the benchmark Nikkei average posted its worst weekly
fall in three months as worries about rising inflation and
interest rate hikes dampened investor appetite.
The Nikkei ended the day up 85.13 points at 13,973.73. Over
the week, it lost 3.6 percent.
DOLLAR, BONDS
The dollar rose against the euro and the yen and was on
track for its best week in over three years against a basket of
currencies.
"If the tone of (the G8) statement is unchanged from the
last meeting when coordinated action was mentioned, this would
give more support to the dollar," said Michael Klawitter,
currency strategist at Dresdner Kleinwort in Frankfurt.
The dollar index -- against major currencies -- was up 0.15
percent at 73.928, up more than 2 percent on the week and
heading for its biggest weekly gain since April 2005 <.DXY>.
The euro was down 0.8 percent at $1.5334 <EUR=>, with losses
exacerbated by the early indications from Ireland. A "no" vote
could scupper EU reform plans.
The dollar was up 0.3 percent against the yen at 108.26
<JPY=>.
Inflation worries continued to hit fixed income. Bund
futures hit their lowest price since July <FGBLc1> and the
10-year euro zone government bond yield was at 4.657 percent
<EU10YT=RR>, the highest since July.
(Additional reporting by Blaise Robinson)
