* Clear signal of Fed tapering sparks global asset selloff
* U.S. bond yields soar, hitting high-yielding currencies
* Asian markets extend falls on weak China data
* European shares down 1.5 percent in early trade
By Richard Hubbard
LONDON, June 20 (Reuters) - Bonds, shares and commodities fell sharply around the world on Thursday and the dollar rose after the U.S. Federal Reserve explicitly signalled an end to easy money and data showed China's economy slowing down.
The sell-off began after Fed chairman Ben Bernanke confirmed that U.S. economic growth was strong enough to begin tapering back on its $85 billion in monthly asset purchases later this year.
"Bernanke came across as being quite clear and I think people were hoping for a less clear cut path to higher rates and that came as a little bit of shock to the market," Said Luca Jellinek, head of European interest-rate strategy at Credit Agricole.
Ten-year U.S. Treasury note yields hit 15-month highs of about 2.38 percent after the comments, lifting the dollar against a broad range of currencies and sparking slump in global equity markets.
The selling accelerated when a survey of China's factories showed activity slumping to a nine-month low just as a squeeze in the nation's money markets sent short term rates to record highs.
Among a host of unwanted milestones, Asian stocks outside Japan suffered their biggest daily loss since late 2011, German Government bond futures dropped to their lowest levels since February and oil slumped by around $1.50 a barrel.
The prospect of higher U.S. rates ahead added momentum to sell-offs across emerging markets, sending MSCI's benchmark index 3 percent lower. While in Asia currency falls sparked intervention from central banks in India and South Korea.
In Europe the broad FTSEurofirst 300 index, which only last month hit a 5-1/2 year high, was down by 1.5 percent in early trade, while the euro zone's blue-chip Euro STOXX 50 index fell 2 percent.