Updates prices

By Naomi Rovnick, Stella Qiu

LONDON/SYDNEY, May 23 (Reuters) - The dollar headed for its first weekly fall in five weeks against major currencies on Friday and long-dated Treasury yields stayed elevated, as U.S. debt concerns that have mounted for years started driving moves in currencies and global debt.

Investor attention has switched from tariff anxiety to U.S. fiscal concerns in a week where Moody's downgraded the U.S. credit rating and the Republican-controlled House of Representatives on Thursday passed a sweeping tax and spending bill.

Futures contracts tracking Wall Street's benchmark S&P 500 share index ESc1 were steady in European morning trade as investors balanced the tax-cut boost to corporate earnings with longer-term concerns about the U.S. economy.

"It's good for corporates initially, and clearly you're seeing the flip side of that in Treasury markets," Netwealth CIO Iain Barnes said.

But with long-dated debt yields' tendency to impact valuations of other assets, from global currencies to stocks, he said investors were nervous that any further volatility in 30-year Treasuries could start rippling across global markets.

"Multi-asset investors' primary concern is thinking about how these different asset classes respond to each other," he said, adding that he was keeping his own portfolios broadly diversified and neutral on market risk for now, in line with much of the investment industry.

With the U.S debt pile already at $36 trillion, President Donald Trump's plans to slash taxes, cut federal budgets and boost military and border enforcement spending has sparked rollercoaster moves in the long-term debt yields that set the nation's borrowing costs.

The 30-year Treasury yield US30YT=RR was 4 basis points lower but held just above 5% after hitting a 19-month high in the previous session.

"There is certainly nothing in this market move or the passage of this version of the bill that tells me there is going to be meaningful reduction in U.S. bond issuance or this broader concern about global bond supply," said Ken Crompton, senior interest rate strategist at the National Australia Bank.

Yields on 30-year Japanese bonds, which hit record highs earlier in the week as selling driven by domestic fiscal and inflation concerns was exacerbated by moves in U.S. debt, recovered slightly, declining by 5 bps to around 3.10% JP30YTN=JBTC.

Data on Friday showed Japan's core consumer price inflation climbed 3.5% in April in its steepest annual increase for more than two years, raising pressure on the Bank of Japan to keep hiking interest rates.

In the euro area, German Bund yields DE10YT=RR dipped on but stayed on track for their fifth straight weekly rise, tracking U.S. Treasuries.

The benchmark European debt has sold off despite money markets showing that traders anticipate the European Central Bank cutting its main deposit rate to about 1.75% by year-end EURESTECBM5X6=ICAP.

DOLLAR DECLINE

In currency markets, the euro firmed 0.5% to $1.1335 EUR=EBS.

An index =USD tracking the U.S. currency against a basket of peers including the euro and Japan's yen, was 0.2% lower and down 1.3% on the week in its first weekly drop since late April.

Despite the euro's gain, which tends to knock exporters' shares, Europe's Stoxx 600 share index .STOXX gained 0.3% in early dealings and Germany's Xetra Dax GDAXI added 0.4%, as traders stayed cautious towards U.S. assets.

Japan's Nikkei .N225 also gained 0.5% on Friday, with MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rising by the same amount.

Bitcoin BTC= prices dipped from its record high but it was still set for a weekly gain of 6.4% to $110,796.

Oil prices dropped for a fourth consecutive session and were set for their first weekly decline in three weeks, weighed down by renewed supply pressure from another possible OPEC+ output hike in July.

Brent futures LCOc1 fell 0.85% to $63.89 a barrel and U.S. West Texas Intermediate crude futures fell CLc1 0.9% to $60.65.

In precious metals, gold prices =XAU rose just over 1% to $3,321 an ounce.

To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets For the state of play of Asian stock markets please click on: 0#.INDEXA

(Reporting by Naomi Rovnick and Stella Qiu; Editing by Dhara Ranasinghe and x)

((yifan.qiu@thomsonreuters.com))