By Shinichi SaoshiroTOKYO (Reuters) - Equity markets in Asia slipped early on Wednesday as a widespread spike in debt yields dented the allure of risky assets, while the euro stood tall after surging on upbeat euro zone inflation data and hopes that Greece will reach a deal with its creditors.Japan's Nikkei lost 0.6 percent while Australian shares shed 0.5 percent and South Korea's Kospi dipped 0.1 percent.MSCI's broadest index of Asia-Pacific shares outside Japan nudged up 0.1 percent.U.S. Treasury yields spiked to two-week highs overnight after German Bund yields soared on stronger-than-expected euro zone inflation data. Consumer prices rose 0.3 percent year-on-year in May, beating forecasts for a 0.2 percent increase. Higher bond yields tend to dent the attraction of stock investments relative to bonds as seen last month during a global rout in debt markets.The inflation data and corresponding rise in yields boosted the euro as well. The common currency gained further support when the European Central Bank, the European Commission and the International Monetary Fund agreed on the terms of a cash-for-reform deal to be put to Greece in a bid to conclude four months of debt stalemate.It was far from clear if the leftist government of Prime Minister Alexis Tsipras would accept the plan, but markets took it as an encouraging step forward.Focus for the time being was on the ECB's policy meeting later in the day, with the central bank widely expected to reaffirm its commitment to its quantitative easing scheme."If the ECB takes a stance towards capping the once-again rising Bund yields, the euro may retrace its gains. But if the ECB merely reiterates its stance towards its commitment to easing, then yields and the euro could rise further," said Masafumi Yamamoto, senior strategist for Monex Securities in Tokyo.The euro was steady at $1.1144 after rallying 2 percent overnight. The dollar was little changed at 124.06 yen, pulled off a peak of 125.07 struck overnight, its highest since late 2002.The dollar index was flat at 95.964 after shedding 1.6 percent.The greenback's fall gave commodities like crude oil reprieve, with U.S. crude gaining 1.8 percent on Tuesday. The futures last traded at $60.93 a barrel, having eased back 0.5 percent.Join the conversation about this story »
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