Long-term Treasury yields, traditionally subdued in Asian hours, spiked to a fresh 16-year peak , keeping the dollar close to multi-month tops to G-3 rivals the euro, pound sterling and yen. Reuters GraphicsAngst over tighter financial conditions pulled down Asia Pacific stocks as well, overshadowing Wall Street's overnight rally and sounding a warning for European equities. Investor jitters were evident in the underperformance of the Hang Seng's property index (.HSMPI), down a resounding 1.9%. Moody's has upped the stakes with a stern warning that potentially puts the country's last triple-A rating on the line. It comes as the U.S. budget deficit continues to widen on higher spending and falling tax receipts.

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Persons: Jonathan Ernst, Kevin Buckland, Hong, Moody's, Philip Lane, Riksbank's Per Jansson, Jacqueline Wong Organizations: . Federal, REUTERS, Reuters, Asia, Japan's Nikkei, fester, Bloomberg, U.S, Treasury, Thomson Locations: Washington, Asia Pacific