TOKYO (April 24): Asian stocks slipped and the U.S. dollar advanced on Tuesday, as a deluge of U.S. government debt this week and the spectre of inflation and a higher fiscal deficit drove U.S. 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.

U.S. 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 U.S. fiscal conditions," said Hiroko Iwaki, senior strategist at Mizuho Securities, noting the U.S. budget deficit is expected to hit $1 trillion next year.

The bond market is bracing for combined sales of $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 U.S. 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.

U.S. stocks were little changed on Monday as bond yield worries offset optimism on corporate earnings.

Analysts expect earnings growth at S&P 500 companies of nearly 20 percent in the first quarter, the strongest showing in seven years, according to Thomson Reuters data.

Already of around 18 percent of the companies in the S&P 500 that have reported, 78.2 percent beat consensus estimates.

Google parent Alphabet Inc fell 0.4 percent in volatile after-hours trading on Monday after it reported stronger-than-expected earrings.

Higher U.S. bond yields boosted the dollar.

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

Three-month aluminium on the London Metal Exchange last stood at $2,295 per tonne.

The metal had rallied to its highest since mid-2011 last week at $2,718 a tonne on fears of a global shortage as a result of the U.S. sanctions.

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.

"Despite the rise in oil prices in recent weeks, the U.S. rig counts has not increased that much. Recent data shows oil inventories have been falling so I expect oil prices to rise further unless we see a sharp increase in U.S. oil drilling rigs," said Tatsufumi Okoshi, senior commodity economist at Nomura Securities.

U.S. West Texas Intermediate crude futures traded at $68.98 per barrel, near last week's high of $69.56 while Brent crude futures stood at $75.06 after having hit 3-1/2-year highs of $75.20.