Bonds in Japan and Australia retreated on Tuesday, tracking a selloff in Treasuries that has driven the 10-year US yield to its highest since January last year. The yield on a Bloomberg gauge of global government debt advanced for a fourth straight day on Monday, rising to 3.72%, the highest since mid-2008.

The latest catalyst driving yields higher has been Federal Reserve Chairman Kevin Warsh's speech at Jackson Hole on Friday, where he doubled down on his vow to finally tame inflation that's outpaced the central bank's target for five straight years. At the same time, fresh hostilities between the US and Iran have raised concerns about prolonged disruptions to energy flows through the Strait of Hormuz, sending oil prices higher.

"Markets are pricing in a higher path for short rates in the US, but also globally," Idanna Appio, a portfolio manager and senior research analyst at First Eagle Investments said on Bloomberg TV.

"Investors are beginning to reassess what neutral policy rates look like and there has been a gradual increase in those," Appio added.

Worries over elevated government spending in markets like Japan, the UK and the US have also prompted investors to seek greater compensation to own longer-maturity debt. The yield on 10-year Japanese government bonds climbed to 3% for the first time since 1996 on Tuesday. That on similar-maturity Australian debt surged to levels last seen in 2011.

"The bond market is not imploding, but it's sending a very clear memo that stickier inflation means higher for longer policy rates as the absolute minimum," said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities in Singapore.