* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Fears of distressed selling as bond selloff deepens
* U.S. 10-yr yields ease after spike to one-year high
* Australia's central bank tries to stem bond bleeding
* Asian shares ex-Japan hit one-month trough
*
By Wayne Cole and Echo Wang
SYDNEY/MIAMI, Feb 26 (Reuters) - Asian stocks skidded to
one-month lows on Friday as a rout in global bond markets sent
yields flying and spooked investors amid fears the heavy losses
suffered could trigger distressed selling in other assets.
The scale of the selloff prompted Australia's central bank
to launch a surprise bond buying operation to try and staunch
the bleeding, helping yields there come off early peaks.
Yields on the 10-year Treasury note US10YT=RR eased back
to 1.494% from a one-year high of 1.614%, but were still up a
startling 40 basis points for the month in the biggest move
since 2016.
"The fixed income rout is shifting into a more lethal phase
for risky assets," says Damien McColough, Westpac's head of
rates strategy.
"The rise in yields has long been mostly seen as a story of
improving growth expectations, if anything padding risky assets,
but the overnight move notably included a steep lift in real
rates and a bringing forward of Fed lift-off expectations."
Markets were hedging the risk of an earlier rate hike from
the Federal Reserve, even though officials this week vowed any
move was long in the future.
Fed fund futures 0#FF: are now almost fully priced for a
rise to 0.25% by January 2023, while Eurodollars 0#ED: have it
discounted for June 2022.
Even the thought of an eventual end to super-cheap money
sent shivers through global stock markets which have been
regularly hitting record highs and stretching valuations.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS slid 2.4% to a one-month low, while Japan's
Nikkei .N225 shed 2.5%.
Chinese blue chips .CSI300 joined the retreat with a drop
of 2.5%.
NASDAQ futures fell 0.5% NQc1 after a sharp drop
overnight, while S&P 500 futures ESc1 eased 0.1%. EUROSTOXX 50
futures STXEc1 lost 1.2% and FTSE futures FFIc1 1.1%.
EMERGING STRAINS
Overnight, the Dow .DJI had shed 1.75%, while the S&P 500
.SPX lost 2.45% and the Nasdaq .IXIC 3.52%, the biggest
decline in almost four months for the tech-heavy index.
Tech darlings all suffered, with Apple Inc AAPL.O , Tesla
Inc TSLA.O , Amazon.com Inc AMZN.O , NVIDIA Corp NVDA.O and
Microsoft Corp MSFT.O the biggest drags.
All of that elevated the importance of U.S. personal
consumption data due later on Friday, which includes one of the
Fed's favoured inflation measures.
Core inflation is actually expected to dip to 1.4% in
January which could help calm market angst, but any upside
surprise would likely accelerate the bond rout.
The surge in Treasury yields also caused ructions in
emerging markets, which feared the better returns on offer in
the United States might attract funds away.
Currencies favoured for leveraged carry trades all suffered,
including the Brazil real, Turkish lira and South African rand.
The flows helped nudge the U.S. dollar up more broadly, with
the dollar index rising to 90.360. It also gained on the
low-yielding yen, briefly reaching the highest since September
at 106.42 JPY= . The euro eased a touch to $1.2152 EUR= .
The jump in yields has tarnished gold, which offers no fixed
return, and dragged it down to $1,767 an ounce XAU= from the
week's high around $1,815.
However, analysts at ANZ were more bullish on the outlook.
"We now expect U.S. inflation to hit 2.5% this year," they
said in a note. "Combined with further depreciation in the U.S.
dollar, we see gold's fair value at $2,000/oz in the second half
of the year."
Oil prices held near 13-month highs, with profit-taking
limited by a sharp drop in U.S. crude output last week due to
the winter storm in Texas. O/R
U.S. crude CLc1 fell 44 cents to $63.08 per barrel and
Brent LCOc1 lost 33 cents to $66.55.
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Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
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(Editing by Sam Holmes)