* Ex-Japan Asia down 0.1 pct, Nikkei falls 0.6 pct
* Caterpillar earnings highlight concerns about economic peak
* U.S. bond yields rise at 3 pct, Jan 2014 high in focus
By Hideyuki Sano
TOKYO, April 25 (Reuters) - Asian shares were under pressure on Wednesday, with a rise in U.S. bond yields above the 3 percent threshold and warnings from bellwether U.S. companies of higher costs driving fears that corporate earnings growth may peak soon.
MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.1 percent while Japan’s Nikkei dropped 0.6 percent.
Wall Street shares lost steam the previous day, with the S&P 500 falling 1.34 percent, the most in two-and-a-half weeks.
Caterpillar, an industrial heavyweight, beat earnings estimates due to strong global demand but its shares tumbled 6.2 percent after management said first-quarter earnings would be the “high water mark” for the year and warned of increasing steel prices.
“We’ve seen quite a lot of companies announcing above-estimate earnings and their shares falling sharply,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
Fujito noted major financial shares such as Goldman Sachs and Citigroup as well as Google parent Alphabet , the first major tech firm to report earnings, have followed a similar pattern.
“If shares are falling when corporate earnings are rising 20 percent and the economy is growing at 3 percent, the market is in trouble. The market reaction so far feels as if we are starting to see an end of its long rally since 2009. Investors could be thinking that the best time will be soon behind us,” he said.
Creeping gains in U.S. Treasury yields are fuelling fears. The 10-year yield, a benchmark for global borrowing costs, has been driven steadily higher by a combination of concerns over inflation, growing debt supply, and rising Federal Reserve borrowing costs.
The 10-year U.S. Treasuries yield rose to as high as 3.003 percent on Tuesday and last stood at 2.992 percent.
A break of its January 2014 high of 3.041 percent could turn investors even more bearish.
Fed Funds rate futures price have been constantly falling this month, pricing in a considerable chance of three more rate hikes by the end of this year.
Rising U.S. rates underpinned the U.S. dollar in the currency market.
The euro stood at $1.2234, not far from Tuesday’s low of $1.2182, a low last seen on March 1.
The dollar traded at 108.83 yen after having jumped to a 2 1/2-month high of 109.20 yen on Tuesday.
Oil prices slipped back from near 3 1/2-year highs as the talks between U.S. President Donald Trump and French President Emmanuel Macron eased concerns Washington may reinstate sanctions against Iran, although Trump refrained from committing to staying in a 2015 nuclear deal.
Brent fetched $74.02 a barrel, up 0.2 percent on the day. On Tuesday it rose to $75.47, its highest since November 2014. West Texas Intermediate (WTI) crude traded at $67.83, up 0.2 percent so far in Asia.
WTI’s discount to Brent WTCLc1-LCOc1 widened to as much as $6.32, the most since Jan. 2, on rising U.S. production.
Reorting by Hideyuki Sano Editing by Eric Meijer