* U.S. Treasury yields at multi-year highs
* German bond yields rise as ECB urged to end asset purchases
* Dollar set for biggest monthly fall in nearly two years
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Alasdair Pal
LONDON, Jan 29 (Reuters) - Technology stocks were in focus on Monday at the start of a big week of earnings for the sector globally, while bond yields hit multi-year highs as investors braced for major central banks to step back from ultra-easy monetary policies.
The MSCI's global information technology sector index hit a record high but retreated after a report that Apple had reduced production targets for its iPhone X. That dented share prices of a number of European companies in its supply chain, leaving the sector flat on the day.
The early gains were fuelled by Swiss chipmaker AMS, a key Apple supplier, which reported a doubling of annual revenue and upgraded earnings guidance ahead of expectations.
Futures pointed to the U.S. tech-focused NASDAQ opening 0.3 percent lower, with the Dow Jones and S&P 500 down by similar amounts after notching their best four-week run since 2016 on Friday.
European tech stocks continued to outperform, up 0.5 percent against a fall of 0.1 percent for the pan-European Stoxx 600 index.
"Technology stocks have been at the forefront of equity market gains, and this week are pivotal for keeping the momentum going," said Rebecca O’Keeffe, head of investment at Interactive Investor.
U.S. technology heavyweights Apple, Alphabet, Facebook, Microsoft and Amazon are all due to report earnings this week.
U.S. and European bond yields reached milestones as investors prepare for central banks to tighten monetary policy, with a European Central Bank policymaker having said the ECB should spell out that it would end its bond purchases this year.
"There is no reason whatsoever to continue the programme," Dutch central bank chief Klaas Knot said on Sunday.
There was a rise in borrowing costs for Germany, the euro zone's biggest economy, with the five-year bond yield briefly turning positive for the first time since 2015 to reach a high of 0.013 percent. It was last trading at zero.
The 10-year Treasury yield rose to 2.724 percent , its highest since early 2014. Two-year Treasury yields rose to 2.161 percent, their highest since 2008.
"The Knot comments are a factor behind the sell-off in bonds today," said DZ Bank rates strategist Andy Cossor. "There's also the sell-off in U.S. Treasuries."
Helped by rising bond yields, the dollar edged higher against a basket of currencies, rising 0.3 percent to 89.37 after six consecutive weeks of losses.
Conflicting signals from top U.S. officials last week did little to discourage bearish positions, with net short dollar bets increasing to their highest level since October, latest positioning data showed.
Despite Monday's rise the dollar is set to post its biggest monthly decline since March 2016.
The currency's decline has been a boon for many commodities, with gold reaching a 17-month peak last week and last trading at $1,341 an ounce.
Oil prices dipped on Monday but remained set for their best January in five years. (Reporting by Alasdair Pal; Additional reporting by Dhara Ranasinghe and Saikat Chatterjee; Editing by Catherine Evans and David Goodman)