FOREX-Dollar hits 13-month high as rate-hike bets, stock rout boost demand

* Dollar index touches 13-month high against major currencies

* Tech stock selloff sparks safe-haven demand

* Yen slides despite Tokyo intervention warnings (Updates to Asia afternoon)

By Jiaxing Li

HONG KONG, June 24 (Reuters) - The U.S. dollar extended gains to reach a fresh 13-month high against a basket of major currencies on Wednesday, as investors sought shelter from a tech stock selloff and prepared for rate hikes from the Federal Reserve.

Stock market volatility continued after a broad selloff of technology and semiconductor sectors dragged global shares lower, sparking safe-haven demand for the dollar and bonds.

Meanwhile, expectations of a U.S. rate hike continued to build with Fed officials sounding increasingly hawkish as the economy remains strong. Markets are pricing in a 36% chance of a hike at the July meeting, up from 8.5% a week ago, according to CME FedWatch. For September, the chance of a rate rise has risen above 70% from 29.1%.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, climbed to a high of 101.51, the strongest level since May 2025.

"The U.S. dollar is still the preferred safe haven," said Ray Attrill, head of FX strategy at National Australia Bank.

"Obviously the momentum is on its side at the moment, but I think there is a lot priced in," he said. "We'll have to see a correction in risk sentiment, one that's broader rather than just the tech sector, or the market further ratcheting up its expectations for hikes, before the dollar can go very much higher from here."

The euro last traded at $1.1363, near a one-year low. The British pound weakened slightly to $1.3194 after Bank of England policymaker Alan Taylor said an "extended hold" for interest rates was the right response to inflation pressures.

The risk-sensitive Australian dollar was steady at $0.6918, an 11-week low, as mixed inflation data muddied bets on a rate hike. The New Zealand dollar weakened roughly 0.3% to $0.5654, a fresh seven-month low.

Also supporting safe-haven demand, the U.S. and Iran appeared to be at odds on some major aspects of their framework agreement, including nuclear matters and control of the Strait of Hormuz, raising questions about the viability of their fragile peace deal.

YEN STRUGGLES TO SHAKE OFF WEAKNESS

The Japanese yen last traded at 161.55, struggling to regain ground as the greenback's strength persisted. A break above 161.96 would leave the yen at its weakest level since 1986.

The latest round of verbal warnings from Japanese officials this week has done little to relieve sustained pressure on the currency and the government is now making plans to better manage its $1.3 trillion foreign exchange reserves for yen intervention.

The Japanese yen could weaken to 165 per dollar if the Fed raises interest rates this year, former Bank of Japan policymaker Sayuri Shirai said.

Some Bank of Japan board members called for additional rate hikes to push the central bank's policy rate closer to levels deemed neutral to the economy, a summary of opinions from their June policy meeting showed on Wednesday.

(Reporting by Jiaxing Li; Editing by Kate Mayberry and Thomas Derpinghaus)