* Euro near multi-year peaks on yen, dollar
* Bond yields spike as inflation expectations flare
* Amazon shares jump 6 pct after hours on record profit
* Bitcoin tumbles further from December's record high
By Swati Pandey
SYDNEY, Feb 2 (Reuters) - The euro neared multi-year peaks on Friday as talk of policy tightening in Europe and expectations that inflation is set to gear higher drove up borrowing costs globally.
Yields on 10-year U.S. Treasuries jumped to a near four-year peak, markedly steepening the curve and squeezing out investors who had feverishly bet on a tighter spread between longer-dated and short-dated yields.
Global central banks have recently struck a more hawkish tone with impressive economic data and buoyant oil prices driving up long-term inflation expectations.
The European Central Bank, for one, is widely expected to end its asset-purchase programme as early as September. That has pushed five-year German Bund yields above zero for the first time since 2015. UK gilt prices also cheapened significantly.
Investors reacted by bidding the euro broadly higher from a more than two-year top on the yen and a three-year peak on the dollar at $1.2509.
Yet rising U.S. yields have failed to prop up the dollar index, which slipped for a third straight day to loiter around a three-year trough.
"The trade weighted dollar continued to weaken very broadly in 2018 with the two key pillars being growth strengthening elsewhere in the world, supporting emerging market forex... and central bank divergence narrowing, supporting euro, yen and British pound," JP Morgan analyst Charles Perrin wrote in a note to clients.
"The currency was also dragged by U.S. politics."
The United States is witnessing deep partisan political divisions and intraparty squabbles with lawmakers unable to find common ground on most issues. The federal government shut down last month for three days when Republicans and Democrats failed to strike a deal to fund public operations.
The dollar is not far off a 4-1/2 month low against the yen .
Bitcoin, the world's biggest and the best known cryptocurrency, continued to tumble after hitting a record high $19,666 in December on the Bitstamp exchange. It was last down 11 percent at a more than two-month trough of $8,940.
Asian shares were muted following mixed signals from Wall Street. MSCI's broadest index of Asia-Pacific shares outside Japan paused around record highs.
Japan's Nikkei slipped 0.6 percent while South Korea's benchmark index eased 0.4 percent.
On Thursday, the Dow Jones Industrial Average rose 0.14 percent, the S&P 500 eased 0.06 percent and the Nasdaq Composite lost 0.35 percent.
High-profile tech companies reported after the closing bell on Wall Street, with Amazon.com surging 6 percent after reporting the largest profit in its history.
Alphabet was down nearly 3 percent in extended trade after its earnings missed estimates.
Apple bounced more than 3 percent after posting its results.
In commodities, gold hovered near a six-month peak at $1,348.2 an ounce.
Oil rose after a survey showed the Organization of the Petroleum Exporting Countries' commitment to its supply cuts remains in place, even as U.S. production topped 10 million barrels per day for the first time since 1970.
U.S. crude rose 36 cents to $66.16 per barrel and Brent edged 89 cents higher to $69.78.
Editing by Richard Pullin