Bond Yields Soar as Stocks Wobble Amid Sovereign Debt Concerns

Global bond yields have stabilized but remain high, causing stocks to wobble globally. The U.S. and European stock futures were down about 0.2% in the Asia session. Japan's Nikkei fell 3.3%, while South Korea's KOSPI slid nearly 6%. The selloff was triggered by fears over swelling sovereign debt, which pushed borrowing costs higher.

The yield on the U.S. long bond steadied around 5.27% after hitting its highest in nearly 20 years at 5.3371%. German and French debt futures were stable after a selloff that took German 10-year and 30-year yields to their highest since 2011.

National Australia Bank's chief economist Sally Auld warned that if there is a meaningful bond sell-off, it could become challenging for asset classes like property and equities. The inflation outlook remains troubling with Brent crude futures above $90 a barrel.