European stocks (.STOXX) tumbled as much as 0.6% before clawing back some ground, with indexes in France (.FCHI) and Germany (.GDAXI) both posting losses.
Thirty-year Treasury yields also rose above 5% for the first time since August 2007.
Earlier, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) had fallen 1.3%, its second straight daily drop of over 1%.
In commodity markets, the stronger dollar has helped put the brakes on oil prices and higher yields have weighed on gold.
Reporting by Tom Wilson and Tom Westbrook; Editing by Simon Cameron-Moore and Mark PotterOur Standards: The Thomson Reuters Trust Principles.
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Issei Kato, Sandrine Perret, it's, Mel Siew, Kit Juckes, Tom Wilson, Tom Westbrook, Simon Cameron, Moore, Mark Potter
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