* Dollar rises 0.3 percent on U.S. yields
* Investors focused on Thursday's ECB meeting
* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh
By Tom Finn
LONDON, April 25 (Reuters) - The dollar hit a four-monthhigh on Wednesday after a rise in benchmark U.S. Treasury yieldsabove 3 percent rattled some currency bears while a mixedpicture from business surveys failed to help the euro before aEuropean Central Bank meeting.
Asian shares fell on Wednesday after a sharp sell-off inU.S. markets and warnings from U.S. companies of higher costsdrove fears that a boom in corporate earnings may be near itspeak when concerns of fiscal stimulus in a late U.S. economiccycle have pushed bond yields higher.
"With rising bond yields spoiling the fun and disappointmentaround the U.S. tech sector putting a dampener on sentiment,hopes are pinned on earnings delivering," said Societe Generalemacro strategist Kit Juckes.
The dollar index against a basket of six major currenciesrose 0.4 percent to 91.093. It had climbed overnight to91.076, highest since Jan. 12, before a slide in Wall Streetstocks tempered investor risk appetite.
Against the yen, the dollar neared a two-month high of109.20 yen hit in the previous session. It was a notchbelow that at 109.18 yen, up 0.3 percent on the day.
The greenback had risen without pause through much of thepast week as U.S.-China trade conflict fears receded and allowedthe market to turn its attention back to dollar-supportivefundamentals, notably the surge by U.S. yields.
The dollar squeeze has been most severe against thosecurrencies heavily backed by speculative investors including theBritish pound, New Zealand dollar and Mexican peso.
Investors are focused on the euro-dollar exchange rate whichhas remain stuck in its recent range.
Analysts say the market needs clarity about the speed of theEuropean Central Bank's monetary tightening cycle before theeuro, which rallied at the start of this year before running outof steam in the last two months, breaks higher.
The ECB holds its monetary policy meeting on Thursday.
The euro stormed into 2018 in rally mode as traders bet thatsynchronized global growth would force the ECB to acceleratemonetary policy normalization.
But the ECB's reluctance so far to signal any shift leavesthe "euro's gains against the dollar vulnerable to setbacks",said Commerzbank analyst Thu Lan Nguyen in a note.
Nguyen said that the euro-dollar exchange rate continues tobe dominated mainly by moves in the US dollar that is nowbeginning to benefit from higher US interest rates.
This week the gap between U.S. and German 10-year governmentbond yields has hit its widest in 29 years and the U.S.-Japanese10-year yield spread reached its broadest in nearly11 years.
The treasury yield extended its overnight rise and touchedthe four-year peak of 3.009 percent, reflecting the durabilityof the U.S. economic expansion. Accelerating inflation andconcerns about increasing debt supply have also driven yieldshigher.
The pound was down 0.2 percent at $1.3947. Itplumbed a one-month low of $1.3919 on Tuesday before rebounding0.3 percent, on news about a possible takeover of Britishpharmaceutical company Shire Plc by Japanese drugmakerTakeda Pharmaceutical Co.
The Australian dollar shed 0.4 percent to $0.7569as it dropped into a four-month trough.
The New Zealand dollar extended losses and dipped to $0.7102NZD=D4, its weakest since Jan. 4.
The Canadian dollar performed a little better on headlinesciting Canadian Foreign Minister Chrystia Freeland that "goodprogress" was being made on NAFTA negotiations.(Editing by Keith Weir)
