A look at the day ahead in European and global markets from Kevin Buckland

Soaring bond yields continued to unnerve equity investors on Wednesday, with benchmark U.S. Treasuries pushing further above 4.5% in Tokyo hours and their Japanese counterparts hitting levels not seen since 2011.

Concerns that stubborn inflation will keep interest rates high for longer or even spur additional near-term hikes is at the heart of that movement, with a particular focus on the U.S. Federal Reserve.

Unexpected improvement in U.S. consumer confidence has seen bets pared back for a Fed cut come September, helping lift Treasury yields, which in turn lifted the dollar, especially against the rate-sensitive yen.

That is feeding inflationary worries at the Bank of Japan, as the yen, at its weakest for 34 years, forces policymakers into a more hawkish posture. Market participants have reacted by bringing forward bets for additional Japanese rate hikes and a start to quantitative tightening.

The benchmark yield in Australia surged some 15 basis points after a hotter-than-expected consumer price index (CPI) added to the risk, albeit small, that the country's next rate move is a hike instead of a cut.

The string of upward data surprises ups the ante ahead of today's release of preliminary German CPI figures for May and consumer confidence surveys for Germany, France and Italy.

The upshot in Asia was stock markets under water pretty much everywhere except mainland China.

And while high-flying Nvidia may have pulled the Nasdaq out of bonds' gravitational pull to reach record heights on Tuesday, futures point to a weaker restart.

With equity indexes in many places sitting at or close to all-time peaks, there's plenty of room to fall.

That makes the stakes particularly high for the week's main macro event on Friday: the PCE deflator, the Fed's preferred inflation measure.

Key developments that could influence markets on Wednesday:

-Germany preliminary CPI (May)

-Germany, France, Italy consumer confidence (May)

-Fed's Beige Book

(By Kevin Buckland; Editing by Christopher Cushing)