Across Asia, most major markets were in the red, with Tokyo leading losses as the Nikkei declined more than 1%

Asian markets dropped Wednesday as surging bond yields and stubborn inflation concerns knocked investor confidence.

Across Asia, most major markets were in the red, with Tokyo leading losses as the Nikkei declined more than 1% in morning trade.

Sydney, Hong Kong, Singapore, Shanghai, Wellington, Manila and Kuala Lumpur were also trading down. Seoul and Taipei were ahead.

The decline comes just days after a tech-driven rally pushed global equities to new highs.

But investors are increasingly questioning whether the artificial intelligence-led surge in valuations has outrun underlying fundamentals.

Elsewhere, the S&P 500 and the tech-rich Nasdaq posted a third straight day of declines, with the yield on the 30-year US Treasury jumping to levels last seen in 2007.

High energy prices sparked by the Middle East war have fuelled fears of inflation, in turn prompting the bond sell-off.

Oil prices above remained above $100 a barrel since then, raising concerns that inflation could remain elevated for longer and erode corporate margins as well as consumer demand.

Iran warned it would “open new fronts against” against the US if it resumed its attacks.

The US president told reporters at the White House on Tuesday that he had been just “an hour away” from relaunching Washington’s attacks on Iran before postponing the order, after weeks of a fragile truce and stalled talks to end the war that began late February.

The president offered a deadline of several days for resuming strikes if a deal was not agreed.

Since the US and Iran began their war with Iran, the Strait of Hormuz – a key energy corridor which normally sees 20% of global crude transit through – has been effectively closed to shipping.