LONDON/TOKYO – Global stocks slipped and bond yields fell on Tuesday, over fears of a global recession.

US long-term Treasury yields dropped to a four-month low, while euro zone bond yields fell. The dollar and Japanese yen gained. Crude oil also sank amid signs of a global manufacturing downturn.

MSCI world equity index, which tracks shares in 47 countries, fell 0.4 percent. The broad Euro STOXX 600 shed 0.7 percent before clawing back some of its losses.

Wall Street stocks were set to fall around 0.7 percent, futures gauges showed.

The benchmark 10-year US Treasury yield fell as low as 2.53 percent in Tokyo trade, the lowest since April 5, also benefiting from bets a slowdown could spur the US Federal Reserve to ease off the policy-tightening pedal.

Germany's 10-year government bond yield fell 4.5 basis points to 0.72 percent, after hitting its lowest since early April.

Brent futures edged down to $99.55 a barrel after losing almost $4 overnight. US West Texas Intermediate futures also eased to $93.59, extending Monday's almost $5 slide.

MSCI's broadest index of Asia-Pacific shares retreated 1.3 percent.

Aussie weakens

The flight for safety played out in currency markets, too.

The US dollar slid to as low as 130.40 against the Japanese yen, levels not seen for almost two months. Against a basket of currencies, the dollar rose 0.25 percent to 105.61.

Australian stocks pared declines and the Aussie dollar weakened after the central bank raised the key rate by an as-expected 50 basis points, with markets interpreting changes to the accompanying policy statement as dovish.

The Aussie was 0.51 percent lower at $0.69910, extending a 0.14 percent retreat following the Reserve Bank of Australia's policy decision.

It had hit the highest since June 17, at $0.7048, in the previous session but that was after bouncing off a 26-month trough at $0.66825 in the middle of last month.

"The Aussie has been underperforming other major currencies lately given global growth concerns so it really needed a hawkish surprise to reignite its recovery from 2-year lows," said Sean Callow, a currency strategist at Westpac in Sydney.

"Instead, it got the RBA leaving the door wide open to slowing the pace of tightening at future meetings."

Cryptocurrencies, a barometer for risk appetite, also fell, with bitcoin slipping 2.3% to $22,753.