Oil Surge and Higher Yields Weigh on Asian Stocks

Asian stocks took a hit on Wednesday as rising oil prices and higher bond yields weighed heavily on markets. The Nikkei index led declines, falling 2.7% in Japan's market, while South Korea's KOSPI dropped 3%. Investors remained focused on the Bank of Japan's interest rate decision later this month, with Governor Kazuo Ueda stating that the central bank would continue to consider rate increases.

The surge in oil prices has raised concerns about inflation and its potential impact on central banks' monetary policies. The US Treasury Department had met with Ueda earlier this week, calling for 'decisive' monetary steps to combat the weak yen. Oil prices rose to around $96 a barrel, extending gains from an earlier five-week high.

In other regional news, Australia's GDP beat forecasts in Q2, growing 0.4% from the previous quarter and taking annual growth to 2.1%. However, this data reinforced expectations of another Reserve Bank of Australia rate hike this year.