Asian stocks report losses as 10-year treasury yield rises to 3 percent

• Asian equities track US stocks lower. 
• Investors assess the implications of rising treasury yields. 

Asian stocks are reporting moderate losses on Wednesday as investors assess the impact of the rising Treasury yields. 

Scorecard

• Japan's Nikkei index is down 0.36 percent. .
• Hong Kong’s Hang Seng Index has shed 0.90 percent. 
• Shanghai Composite is reporting a 0.30 percent drop. 
• South Korea’s Kospi index is down 0.90 percent. 

The 10-year treasury yield is trading at 3 percent and looks set to extend the rally on inflation fears and Fed rate hike bets. A surge in the borrowing costs in the US makes the US dollar attractive especially against currencies of the nations (EMS, Asian economies) who depend on hot money inflows to plug their current account deficits. 

Hence, the decline in the Asian equities should not come as surprise. Also, the overnight drop in the US stocks could be weighing over the Asian markets. The Dow Jones Industrial Average fell 1.7% on Tuesday as bell weather industrial giants Caterpillar and 3M warned on profit forecasts. 

Moving forward, the stock markets may take a turn for the worst if the rally in the US 10-year yield picks up speed.