Asian stocks slipped and the US dollar advanced on Tuesday, as a deluge of US government debt this week and the spectre of inflation and a higher fiscal deficit drove US borrowing costs near four-year highs.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.25 percent. Japan's Nikkei rose 0.7 percent thanks to fall in the yen.

US bond prices have fallen for the past four days, pushing up the 10-year yield to 2.998 percent , its highest level since January 2014.

"There are concerns about inflation, rising oil prices and also US fiscal conditions," said Hiroko Iwaki, senior strategist at Mizuho Securities, noting the US budget deficit is expected to hit USD 1 trillion next year.

The bond market is bracing for combined sales of USD 96 billion in coupon-bearing Treasuries this week as the Treasury has ramped up its borrowing following last year's massive tax overhaul and a two-year budget agreement reached in February.

Inflation worries are also mounting as oil and commodity prices have been rising in recent weeks.

Market gauge of investors' inflation expectations such as the 5-year forward inflation swap and 10-year breakeven yield have hit their highest levels in many months.

Investors are concerned that US inflation, long subdued since the financial crisis a decade ago, could gain momentum as President Donald Trump's tax cuts this year could stimulate an economy already near or at full employment.

US stocks were little changed on Monday as bond yield worries offset optimism on corporate earnings.A

The euro fell to USD 1.2198, its lowest level since March 1, when Trump unveiled his steel and aluminium tariffs. The common currency last stood at USD 1.2208.

The dollar jumped to 108.755 yen, rising almost 1.0 percent on the previous day to hit its highest level in ten weeks.

The greenback also strengthened against emerging market currencies, hitting three-month high against the South African rand and 1-1/2-year highs against the Brazilian real

In commodities, aluminium fell 7 percent on Monday, its biggest one-day drop in eight years, after the United States extended the deadline for sanctions on Russian aluminium producer Rusal .

Oil prices held near 3-1/2-year highs supported by production cuts by oil producing countries and wariness about geopolitical risks in the face Washington's threat to scupper the nuclear deal with Iran.