GLOBAL MARKETS-Stocks rise after recent declines; Japanese yen jumps against US dollar

Updates to US midday

By Caroline Valetkevitch

Sept 2 (Reuters) - A global stock index rose on Wednesday after recent declines and investors watched for new developments in the U.S.-Iran conflict, while the Japanese yen gained sharply against the U.S. dollar.

It was not immediately clear what prompted the yen move. The currency had retraced over the last month approximately half of its increases made after a rare joint intervention by the U.S. and Japan at the end of July. The yen JPY= was last up 0.92% at 158.72 per dollar on Wednesday.

U.S. Treasury yields eased from multi-year highs. The rise in borrowing costs across major economies had deepened concerns about tighter monetary policy and deteriorating fiscal conditions.

Investors remained focused on Iran, a day after the U.S. launched a barrage of airstrikes against Iran, prompting Iranian attacks on U.S. targets in the region, in the most serious escalation in weeks in the conflict.

Oil prices were moderately higher amid fears of further disruption to energy supplies. U.S. crude CLc1 was up 0.62% at $90.79 a barrel.

Wall Street stocks were solidly higher on the day after the escalation in the Middle East and the global bond selloff had given September a shaky start.

"We're seeing a little bit of a relief rally in stocks after the underperformance that came," with higher yields, said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

Investors may be looking for bargains after the recent selling, he said. "The (U.S.) economy itself remains strong, so one of the difficulties in investing in stocks is that a strong economy often leads to higher rates, and you have that tension between good earnings and the potential for the competition that bonds can offer."

The Dow Jones Industrial Average .DJI rose 289.55 points, or 0.55%, to 53,059.62, the S&P 500 .SPX rose 45.54 points, or 0.60%, to 7,677.30 and the Nasdaq Composite .IXIC rose 130.03 points, or 0.50%, to 26,230.25.

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 1.14 points, or 0.10%, to 1,143.91 after ending lower for the previous three sessions.

The pan-European STOXX 600 .STOXX index fell 0.21%.

The yield on the benchmark U.S. 10-year Treasury note shed 0.2 basis point to 4.794% and was on track to snap its longest streak of daily gains since March. The yield hit an earlier high of 4.818%, its highest since November 1, 2023.

The yield on the 10-year Japanese government bond JB10YT=RR held above 3% for a second straight session after hitting a three-decade high earlier this week.

Traders have recently increased bets on a Federal Reserve interest rate hike.

Ahead of the Fed's September 15-16 meeting, investors are looking to upcoming U.S. economic data for clues on whether the economy remains strong enough to justify monetary policy tightening. The key monthly U.S. jobs report is due on Friday.

Traders now assign a roughly two-in-three chance that the Fed will deliver a 25-basis-point rate increase this month, up from 37% a week ago, according to CME Group's FedWatch tool.

Policy meetings of the European Central Bank and the Bank of Japan will also be closely watched as markets gauge how far major central banks are prepared to tighten policy in response to persistent inflation risks.

Spot gold rose 0.9% to $4,367.68 an ounce.

(Reporting by Caroline Valetkevitch in New York; Additional reporting by Medha Singh in Bengaluru and Gregor Stuart Hunter in Singapore; Editing by Tom Hogue, Mark Potter, Gareth Jones, Philippa Fletcher)

((caroline.valetkevitch@thomsonreuters.com))