TOKYO / LONDON - US Treasury yields hit a peak not seen since the early tremors of the 2007-2008 global financial crisis on Tuesday, as mounting fears of rates staying elevated for longer sent jitters through risk assets globally and pushed the dollar to a 10-month high.

Asian and European stock benchmarks sagged, with US equities set to follow suit, and crude oil retreated from 10-month highs on remarks from Federal Reserve officials that drove a bearish steepening of the US yield curve.

The yield on 10-year Treasury notes rose as high as 4.566 percent, a 16-year peak, while a hefty pipeline of US treasury auctions this week and fears of a US government shutdown all further fed the skittish mood.

Euro zone bond yields also held near multi-year highs as the narrative that central banks will keep rates higher for longer held sway.

Germany's 10-year government bond yield, the euro area's benchmark, was last little changed on the day at 2.789 percent, having briefly hit a 12-year high of 2.813 percent in early trade.

The US dollar index - which measures the currency against six major developed market peers, including the euro and yen - ticked up 0.2 percent to 106.2, the highest since November 2022, as the world's biggest economy continued to outperform.

The benchmark STOXX index of 600 European shares slid 0.4 percent, in line with an earlier fall in MSCI's broadest index of Asia-Pacific shares.

Tokyo's Nikkei lost 0.93 percent. 

US stock futures pointed 0.7 percent lower, following a 0.4 percent rise for the S&P 500 overnight.

Traders now put the odds of another quarter-point Fed hike by January at a coin toss, and have pushed the likely start of rate cuts to summer.

Chicago Fed President Austan Goolsbee said on Monday that inflation staying entrenched above the central bank's 2 percent target remains a bigger risk than tight Fed policy slowing the economy more than needed.     

Minneapolis Fed President Neel Kashkari said more rate hikes are likely needed given the resilience of the US economy.

The European Central Bank and Bank of England have also touted higher rates for longer in policy meetings since the middle of the month.

The relative outperformance of the US economy - with investors increasingly betting on a soft landing while growth in the euro zone and Britain stagnate - has buoyed the dollar against those currencies.

The euro sagged 0.08 percent to $1.0584, approaching the overnight low of $1.0575, a level last seen in mid-March.

Sterling slipped 0.23 percent to $1.2185, taking it back toward Monday's six-month low of $1.21945.

The dollar also held near an 11-month peak of 148.97 yen from overnight, raising the risk of intervention by Japanese authorities.

Gold drifted slightly lower to $1,913.31, extending its slump from above $1,947 over the past week.

Crude oil remained weak amid concerns that fuel demand will be crimped by major central banks holding interest rates higher for longer, even with supply expected to be tight.

Brent crude futures were down 97 cents at $92.32 a barrel, while US West Texas Intermediate crude futures were trading 92 cents lower at $89.76.