Stocks decline as bond sell-off rattles markets.

As a result of Wednesday's deepening crisis in the global bond markets, which saw U.S. rates hit 16-year highs and challenge equities valuations as well as dampen enthusiasm for risk assets generally, Asian stocks fell to 11-month lows.

The jump in Treasury rates propelled the dollar to fresh highs, with only the yen displaying some resistance amid rumours that the Japanese government may be meddling covertly.

In the late afternoon on Tuesday in London, the yen crossed the 150-per-dollar mark before abruptly rising to 147.3.

The 10-year yield increased by about 12 basis points (bps) on Tuesday as a result of U.S. job openings data, and it increased by another 4 bps in Asia to briefly reach 4.85% for the first rate since 2007.

Even though the Bank of Japan (BOJ) offered to buy $4.5 billion worth of notes on Wednesday, the 10-year yield in Japan, which is capped by the BOJ, increased by 4.5 basis points to a decade high.

U.S. rates in real terms, which erase inflation, are likewise at almost 15-year highs and are drawing capital from all over the world into dollars since the advance did not coincide with a significant change in market indicators of inflation expectations.

The dollar's march caused the euro to overnight drop to its lowest level in 10 months, $1.0448, and the pound to drop to a seven-month low, $1.20535.

Early Wednesday, both traded close to those levels.

Although it was sufficient to calm short sellers, the yen's reversal past the weak side of 149-per-dollar revealed some doubt about whether Japan's finance minister had actually approved an intervention.

Rising rates on long-term U.S. Treasury notes are not yet raising red flags, according to Federal Reserve officials.

Oil prices have been held back in the commodities markets by a stronger dollar, while gold has been hurt by higher rates.

(Sources: investing.com, reuters.com)