* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates http://tmsnrt.rs/2egbfVh
LONDON, Sept 7 (Reuters) - European stock markets fell on Wednesday after U.S. economic data prompted traders to ramp up Federal Reserve rate hikes bets, pushing the dollar to a 24-year high against the Japanese yen.
U.S. Treasury yields jumped and the dollar received a boost after data on Tuesday showed the U.S. services industry picked up in August, reinforcing expectations of aggressive Fed rate hikes. Markets were pricing in a 77% chances of a 75 basis point hike at the Fed's next meeting.
Markets took a further hit in Asian trading from data showing China's export growth slowed in August. MSCI's broadest index of Asia-Pacific shares outside Japan fell to its lowest since mid-2020.
China's exports and imports lost momentum as surging inflation crippled overseas demand and new COVID curbs and heatwaves disrupted output, reviving downside risks for the shaky economy.
“Government bond yields across the board are rising and that's putting pressure on stock markets," said David Madden, market analyst at Equiti Capital.
"This also comes at a time when there’s increasing fears of the global economy slowing down and bond traders are predicting more rate hikes."
At 1134 GMT, the MSCI world equity index was down 0.4% on the day, while Europe's STOXX 600 was down 0.5% . London's FTSE 100 was down 0.5%.
Wall Street futures edged slightly higher, after two sessions of losses.
The U.S. dollar index was up 0.3% on the day at 110.67, having hit a 20-year high of 110.69 earlier in the session .
The 10-year U.S. Treasury yield hit its highest since mid-June at 3.365%, before easing slightly.
"I wouldn't be surprised if the Fed starts to get a bit concerned about the strength of its domestic currency," said Equiti's David Madden, who said a strong dollar could have a negative impact on U.S. exports.
The Japanese yen was at 144.95 yen per U.S. dollar, its weakest since August 1998. Japan's government said it wants to act if "rapid, one-sided" moves in the currency market continue.
The European Union proposed a price cap on Russian gas on Wednesday hours after President Vladimir Putin threatened to halt all supplies if they took such a step, raising the risk of rationing in some of the world's richest countries this winter.
Euro zone government bond yields initially rose in early trading, on expectations of a 75 basis-point rate hike from the European Central Bank on Thursday, but then fell as traders pulled back on these bets in reaction to several media reports, including one that said a 50 bps rate hike remained on the table.
Germany's 10-year yield was at 1.595%, having earlier in the session hit 1.645%, its highest since late June.
"This hawkish stance by the ECB has had a considerable impact on global markets," Kristina Hooper, global market strategist at Invesco, said in emailed comments.
"It has resulted in higher bond yields across the Euro Area but also has arguably contributed to a rise in the US 10-year bond yield."
The euro was down 0.2% at $0.9889 and the British pound was down 0.8% against the stronger dollar at $1.1429 .
Liz Truss, who took over as Britain's prime minister on Tuesday, vowed immediate action to help the economy, which faces double-digit inflation and an expected lengthy recession.
Showing correlation with mainstream financial markets, cryptocurrency bitcoin fell to its lowest since mid-June and the market cap of all cryptocurrencies dropped below $1 trillion, according to data provider CoinGecko.
The Bank of Canada is expected to announce a large rate hike later on Wednesday as it battles to curb inflation at its highest in nearly four decades.
(Reporting by Elizabeth Howcroft, Editing by Angus MacSwan, William Maclean)
