May 29 (Reuters) - A look at the day ahead in Asian

markets.

Japanese consumer confidence and Australian inflation are

the main points of focus for markets in Asia on Wednesday, as

investors ponder the broader implications of a widespread rise

in bond yields.

U.S. Treasury yields, the benchmark for global borrowing costs,

rose to four-week highs on Tuesday in the wake of a weak U.S.

debt auction, leading to a mixed performance on Wall Street.

The Dow fell, the S&P 500 was flat and Nvidia's extraordinary

rally powered the Nasdaq to a fresh record high - shares in the

AI poster child have soared 20% in the last three trading days

and the firm is now worth $2.8 trillion.

But Asian markets on Wednesday may be more sensitive to the

tightening of financial conditions from U.S. yields than the

U.S. tech boom. Some analysts reckon the 10-year Treasury yield

may now be entering a higher range of 4.50% to 4.70%, and the

two-year yield is knocking on the door of 5.00% again.

Closer to home, Japanese Government Bond yields are also

under renewed scrutiny. Yields are making new multi-year highs

across the curve, prompting a flurry of comments from Japanese

and global officials in recent days.

The 10-year JGB yield rose for an eighth straight day on

Tuesday to hit a fresh 12-year high of 1.035%, and the 2-year

JGB yield inched up to a new 15-year peak of 0.36%.

Bank of Japan Governor Kazuo Ueda on Saturday said the bank's

'basic stance' is that long-term bond yields should be set by

markets. But this is difficult for the BOJ, which has for years

been hoovering up JGBs in its battle against deflation and now

owns more than 50% of the entire market.

Higher bond yields raises the BOJ's interest bill. A lot.

On the other hand, higher JGB yields could support the yen,

which officials would probably welcome - Japan's finance

minister on Tuesday said he was more concerned about the down

side of a weak exchange rate right now, namely the increased

burden on companies and consumers from higher import prices.

Do JGB yields take a breather here? BOJ data on Tuesday sent out

mixed signals on inflation - corporate services prices are

rising at their fastest pace since 2015, but other data show key

measurements of underlying inflation falling below the bank's 2%

target for the first time since August 2022.

If 'higher for longer' JGB yields boost the yen, Japan Inc.

could feel the squeeze. The weak currency has attracted huge

foreign investor flows into Japan, but with further 'material'

weakness no longer likely, HSBC strategists are closing their

overweight position in Japanese equities.

Here are key developments that could provide more direction

to markets on Wednesday:

- Australia inflation (April)

- Japan consumer confidence (May)

- IMF's Gita Gopinath briefs media following IMF's annual

assessment of the Chinese economy