EMERGING MARKETS-Asian stocks, bond markets hit after spike in U.S. Treasury yields

    * Graphic: World FX rates
    * Graphic: Foreign flows into Asian stocks
    * Tech-heavy South Korean, Taiwan stock markets fall most
    * Malaysian 10-yr bond yields at highest since July 1, 2020
    * Dollar firms, Indonesia's rupiah hits over nine-week low

    By Rashmi Ashok
    Feb 26 (Reuters) - Asian equities slid and bond yields
spiked on Friday after a sharp rise in U.S. Treasury yields, as
expectations for higher inflation and economic growth increased,
making investors doubt how long central banks would be able to
keep interest rates low. 
    Overnight, the 10-year yield touched its highest
level in a year at 1.614%, causing a sell-off in U.S. equities.
    "The bond market is signalling disbelief that the Fed could
continue keeping rates at such low levels in the face of a
recovering economy and rising commodity costs," analysts at OCBC
wrote in a note.
    They warned that further turmoil in equity markets was
expected if bond yields continued rising as investors look to
rebalance their portfolios.
    Rising bond yields threaten the allure of stocks' dividend
yield, while companies also face a higher debt-servicing burden
because of steeper borrowing costs, making investing in the
relatively riskier stocks less attractive overall. 
    High-yielding bond markets saw steeper selloffs, with
India's 10-year bond yield climbing to its highest
since August last year at 6.215%, from Thursday's close of
    Malaysia's 10-year bond yields surged to 3.054%,
hitting their highest since July 1, 2020. 
    Indonesian yields, however, remained stable for a second
session after the Finance Minister on Wednesday said 2021
financing plans might be scaled back by tapping unspent funds
from 2020.
    Indexes in South Korea and Taiwan, whose
technology stocks have come under added pressure amid the spike
in global yields due to fears they may be over-valued, bore the
brunt of the sell-off, falling 3.3% and 2.9%, respectively.
    Philippine stocks and the peso were the sole
gainers in the region on reopening for trade after a local
holiday on Thursday. The rise came after a subdued performance
through the week when regional stocks had seen bigger gains. 
    Malaysian stocks also saw relatively thinner losses,
after data showed exports rose 6.6% in January, buoyed by higher
shipments of electrical and electronic goods as well as rubber
products, while imports slowed slightly.
    The growing view that ultra-low interest rates may be raised
sooner than expected supported the dollar, which put
pressure on most Asian currencies.
    The South Korean won slipped as much as 1.5% to a
three-week low, while the Indonesian rupiah fell 0.9% to
a more than nine-week low of 14,201 per dollar. 
    The Indian rupee fell nearly 1% against the dollar.
The currency is set to end the week 0.5% weaker, after
six-consecutive weeks of strengthening amid improved economic
outlook and dollar weakness.
    Thai markets were shut for a local holiday.
    ** In the Philippines, top index gainers are Bank of the
Philippine Islands up 5.83% and  Robinsons Retail
Holdings Inc up 4.72% 
    ** Top losers on the Singapore STI include: Venture
Corporation Ltd down 2.23% and Capitaland Ltd
 down 2.17% 
    ** Singapore's 10-year benchmark yield is up 4.7 basis
points at 1.352%​​ 

  Asia stock indexes and                              
 currencies at   0450 GMT                        
                     DAILY  YTD %     X   DAILY  S YTD
                         %                    %      %
 Japan               +0.02  -2.78  <.N2   -2.84   6.80
 China    <CNY=CFX   -0.26  +0.87  <.SS   -1.84   1.33
          S>                       EC>           
 India               -0.90  -0.01  <.NS   -1.56   6.30
 Indones             -0.85  -1.13  <.JK   -1.33   3.80
 ia                                SE>           
 Malaysi             -0.25  -0.69  <.KL   -0.24  -3.04
 a                                 SE>           
 Philipp             +0.41  -1.52  <.PS    1.05  -4.38
 ines                              I>            
 S.Korea  <KRW=KFT   -1.43  -3.35  <.KS   -3.25   4.36
          C>                       11>           
 Singapo             -0.26  -0.59  <.ST   -0.98   3.54
 re                                I>            
 Taiwan              -0.18  +0.63  <.TW   -2.53   8.85
 (Reporting by Rashmi Ashok in Bengaluru. Editing by Gerry