(fxcue news) - Asian stocks followed Wall Street lower on Thursday after longer-dated U.S. Treasury yields hit their highest in 18 months on concerns that a new budget proposal could swell the country's federal deficit. U.S. President Donald Trump is championing an extension of his 2017 tax cuts, which analysts warn could add trillions to the federal governments already massive $36.2 trillion debt pile. The plan has sparked fears of an even wider deficit, especially as interest payments continue to soar. Former Treasury Secretary Steven Mnuchin said during a panel discussion at the Qatar Economic Forum that he's more alarmed by the growing budget deficit than the trade deficit, and urged Washington to prioritize fiscal repair. The dollar stayed weak in Asian trade on U.S. fiscal woes and gold scaled a two-week high while oil extended losses for a third straight session after a surprise inventory build and amid Iran-U.S. nuclear talks. China's Shanghai Composite index slipped 0.22 percent to 3,380.19 and Hong Kong's Hang Seng index fell 1.19 percent to 23,544.31 on U.S. fiscal concerns. Baidu lost 4 percent after posting a marginal rise in Q1 revenues. Japanese markets fell notably as the yen hit a new two-week high against a broadly weaker dollar and Japan's 10-year government bond yield climbed above 1.55 percent, edging closer to levels last seen in 2008. Investors ignored government data that showed Japan's core machinery orders rose 13.0 percent in March from the previous month. Meanwhile, in a rare and explicit statement, U.S. Treasury Secretary Scott Bessent and Japanese Finance Minister Katsunobu Kato agreed on Wednesday that the dollar-yen exchange rate currently reflects fundamentals. The Nikkei average fell 0.84 percent to 36,985.87, hitting a two-week low. The broader Topix index settled 0.58 percent lower at 2,717.09. Seoul stocks tumbled while the local currency jumped to a six-month high after reports suggested that the United States had demanded Seoul to come up with strong measures to boost the won. The Kospi average slumped 1.22 percent to 2,593.67, with Samsung Electronics, SK Hynix, Samsung Biologics and Hyundai Motor falling 2-3 percent. Australian markets ended lower, dragged down by banks and consumer stocks. Gold miners logged one-month closing highs as spot gold prices hit a two-week high on worries about Trump's tax plan. The benchmark S&P/ASX 200 dipped 0.45 percent to 8,348.70 while the broader All Ordinaries index closed down 0.47 percent at 8,571.40. Across the Tasman, New Zealand's benchmark S&P/NZX-50 index slipped 0.32 percent to 12,662.25. Overnight, Wall Street saw one of its most brutal selling sessions in over a month as a deteriorating U.S. fiscal outlook and poor response to the 20-year bond auction led to a spike in bond yields. The thirty-year bond yield climbed above 5 percent due to concerns a new U.S. tax bill could worsen the country's deficit. Downbeat news from companies such as UnitedHealth Group, Target and Wolfspeed also added to the selling pressure. The Dow plunged 1.9 percent, the S&P 500 gave up 1.6 percent and the tech-heavy Nasdaq Composite tumbled 1.4 percent.