MSCI AxJ index down 1.3; Nikkei down 1.5
Wave of nerves as inflation and rates look sticky
U.S. dollar climbs and risksensitive currencies slide

SINGAPORE, June 23 Reuters Asian stocks slumped toward their worst week of the year on Friday, oil fell and the U.S. dollar surged as a string of hawkish central bank surprises made investors nervous about the economic cost of taming inflation.

MSCI39;s broadest index of AsiaPacific shares outside Japan lost 1.3 and is down 4.2 for the week, its worst in nine months. China was closed for a holiday but Hong Kong shares returned from a break with a 2 tumble.

Japan39;s Nikkei fell 1.5 and was set to snap a 10week winning streak with a 2.7 weekly drop. SP 500 futures unwound overnight gains and fell 0.5.

European futures fell 0.6.

The situation we39;ve seen globally in the last couple of weeks is that the Fed is going to be hiking more and it39;s going to take longer to cure this sticky inflation problem, said Damian Rooney, a dealer at Perth stockbroker Argonaut.

He said the Bank of England39;s biggerthanexpected 50basis point rate hike was the straw that broke the camel39;s back.

Markets see British rates hitting 6 by year39;s end, but the outlook inspired only the briefest jump in sterling before it fell along with gilt yields on worry tightening brings economic pain.

With a lack of stimulus for China39;s sputtering recovery, recent unexpected hikes in Australia and Canada and the Federal Reserve39;s forecast for two…