Asian government bond yields advanced early Tuesday following a surge in the 10-year U.S. Treasury yield above 5% the previous day, as escalating tensions in the Middle East heightened concerns over energy prices and inflation.

The 10-year Treasury yield reached as high as 5.012% on Monday--its highest intraday level since 2007--before settling at 4.960%.

"Inflation concerns remain front-of-mind ahead of the FOMC's [Federal Open Market Committee] decision this week, where markets have nearly fully priced in a hike," Westpac's Ryan Wells said in a note. The Fed funds futures market is currently pricing in a 95% probability of a rate increase.

Yields on 10-year Japanese government bonds rose 1.8 basis points to 3.007%, 10-year Australian sovereign securities climbed 2.9 basis points to 5.371%, and 10-year New Zealand government debt increased 1.1 basis points to 5.029%. Bond yields move inversely to prices.

Meanwhile, oil prices remained above $100 per barrel. Front-month WTI crude oil futures were up 1.2% at $102.59 a barrel, and Brent crude oil was 1.2% higher at $106.90 a barrel, according to ICE data.

Both the ongoing territory gains by Iran‑backed Houthi rebels and the closure of a key pipeline in Saudi Arabia have materially altered the state of the oil market, Commonwealth Bank of Australia's Vivek Dhar said in a note.

CBA's low estimate of global markets holding just five to 11 weeks of oil and refined product stockpiles is growing more likely compared with a base case of 15-20 weeks, the strategist noted. If current U.S.‑Iran tensions persist or escalate, the markets could witness a global oil market in uncontrolled demand destruction, Dhar warned.

Asian equities were mixed after the previous session's selloff. Japan's Nikkei Stock Average was recently up 0.3%, while South Korea's Kospi was down 0.4%. Taiwan's Taiex was down 0.1% and Singapore's FTSE Straits Times Index was flat.