Bond yields climb, stocks under pressure as Fed cut doubts resurface

Benchmark U.S. 10-year yields ticked as high as 4.556% in Tokyo trading hours, a level not seen since May 3, following poorly received two- and five-year Treasury auctions overnight.

Equivalent Japanese yields hit the highest since December 2011 at 1.065%, while Australian yields jumped to a more than three-week top at 4.42%.

Investors were also caught off-guard by a sharp improvement in a U.S. consumer confidence measure for May. Economists had predicted a fourth straight month of weaker confidence, particularly after a tepid reading for the 's analogous survey result from Friday.

That has kept the market guessing about the strength of the economy and sticky , which in turn cloud the outlook for the Fed's policy path.

Traders currently put the odds of at least a quarter-point by September at 44% following the data, from a coin toss a day earlier, according to the 's FedWatch Tool.

The dollar rose to a four-week peak of 157.41 yen on Wednesday, while gaining 0.07% against both the euro and sterling.

Australia's dollar though added 0.08% to $0.66545, bolstered by data showing an unexpected jump in local consumer inflation last month.

"Whether incoming U.S. sees the money market pendulum swing back in favour of lower U.S. rates in Q3" will be key to whether the Aussie can retain its upward momentum, strategists wrote in a client note.

"Our base line view is 'yes it will' - we still have September for a first Fed easing, then another by year-end."

Regional were mostly lower on Wednesday, with the notable exception of mainland China.

Japan's Nikkei slipped 0.4%, Australia's benchmark dropped more than 1%, while Hong Kong's Hang Seng tumbled 1.2%.

However, mainland blue chips gained 0.3%

's broadest index of Asia-Pacific shares dropped 0.8%.

U.S. S&P 500 futures pointed 0.2% lower following a flat finish on Tuesday for the cash index.

In energy markets, Brent crude futures for July delivery rose 27 cents, or 0.3%, to $84.49 a barrel. U.S. West Texas Intermediate futures for July climbed 35 cents, or 0.4%, to $80.18.