Asian stocks dip as high bond yields keep markets cautious

Regional shares lacked direction on Thursday as traders balanced cooler US inflation figures with costlier borrowing, dearer crude and doubts about US-Iran negotiations, according to Mettis Global. The broadest MSCI gauge of Asia-Pacific shares outside Japan lost 0.2%, and South Korea's KOSPI eased 0.14%, while Japan's Nikkei gained more than 1% on chip-related buying. Reuters also reported that Micron's strong earnings did little to lift technology shares across the region.

Long-dated US yields remained the main worry, with the 10-year Treasury yield reaching 5.306%, its highest since June 2007, and the 30-year yield at 5.634%, after a sharp global bond sell-off in September. Traders cut their bets on an October 28 Fed rate increase, with the probability of a hike falling to 38% from 50% the previous day, according to CME FedWatch data cited by Reuters. New York Fed President John Williams said there was no urgency for further action, which reinforced expectations that the central bank could hold off.

Oil prices stayed elevated while markets weighed the US-Iran talks and possible restoration of Middle East crude exports, with Brent near $98.15 a barrel after gaining over 14% during September. The US dollar hovered close to a two-month high, and the euro stood at $1.1334.