* MSCI Asia-Pacific index down 0.5 pct, pulls away from record
* Dollar off 3-yr low as US yields climb to near 4-yr highs
* Dollar’s bounce weighs on commodities like oil, gold
* Trump’s State of the Union address awaited for clues
By Shinichi Saoshiro
TOKYO, Jan 30 (Reuters) - Asian stocks retreated from record highs on Tuesday after a selloff in Apple shares knocked Wall Street lower, while the dollar found support as U.S. bond yields climbed to near four-year highs.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.5 percent after rising to an all-time high the previous day.
Australian stocks shed 0.4 percent, South Korea’s KOSPI lost 0.1 percent and Japan’s Nikkei dropped 0.7 percent.
Hong Kong’s Hang Seng slipped 0.2 percent and Shanghai was down 0.3 percent.
The bearish sentiment in Asia followed a softer lead from Wall Street, which has led a global equities rally over the past year thanks to strong world growth fuelling higher corporate earnings and stock valuations.
On Monday, U.S. stocks pulled back from record highs, with the Dow and the S&P 500 indexes marking their biggest one-day percentage declines in about five months, weighed down by a slide in Apple shares.
The dollar, however, enjoyed a reprieve from some persistent selling in the past few weeks.
Buoyed by higher U.S. bond yields, the dollar index against a basket of six major currencies was 0.2 percent higher at 89.470, having bounced overnight from a three-year low of 88.438 plumbed on Friday when peers like the euro outshone the greenback.
The 10-year Treasury note yield stretched its overnight surge above 2.70 percent and reached its highest since April 2014 after comments from a European Central Bank official added to expectations that central banks globally will reduce stimulus as the economic outlook improves.
“This is a rise in real interest rates, also reflecting a rise in inflation expectations,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
“The yield rise may have bumped off U.S. stocks from highs, but a correction was due after their recent gains,” Ichikawa said.
The U.S. Treasury Department said on Monday that it expects to borrow $441 billion through the credit markets in the January-March quarter, less than announced previously.
Treasury yields remained elevated, however, as U.S. borrowing is expected to continue increasing steadily in the coming years as the federal government looks for ways to fund budget deficits.
Moreover, the bond market braced for potentially hawkish language from the Federal Reserve, which will begin its two-day policy meeting on Tuesday.
The focus was also on U.S. President Donald Trump’s State of the Union address scheduled later in the global day, with attention on his views on an infrastructure overhaul and trade.
The euro was down 0.1 percent at $1.2367 after slipping overnight from a three-year peak of $1.2538.
The dollar rose 0.2 percent to 109.110 yen following its descent to a four-month low of 108.280 on Friday.
The Australian dollar shed 0.2 percent to $0.8079 after reaching $0.8136 on Friday, its highest since May 2015.
Oil prices extended losses after being pressured by the dollar’s bounce and rising U.S. crude output.
U.S. crude futures were down 0.5 percent at $65.25 per barrel. Underpinned by the dollar’s recent slide, prices had risen to $66.66 per barrel on Thursday, the highest since December 2014.
Brent crude fell 0.3 percent to $69.24 per barrel.
Spot gold slipped to $1,334.50 an ounce, the lowest since Jan. 23, weighed by the stronger U.S. currency. The precious metal had climbed to $1,366.06 last week, its highest since August 2016. (Reporting by Shinichi Saoshiro; Editing by Shri Navaratnam and Kim Coghill)