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Asian stocks slipped while the U.S. dollar was steadfast on Wednesday, following U.S. inflation data and remarks from central bank officials that have investors worrying interest rates are going to be higher for longer.

Headline U.S. CPI came in at 6.4% year-on-year for January, a bit higher than the 6.2% economists had expected, setting off selling in the bond market and Fed funds futures as hopes that rates could be cut later this year grow dimmer and dimmer.

Fed funds futures now imply a peak above 5.2% by mid-year and rates above 5% at year's end.

Two-year Treasury yields, which rise when prices fall, climbed nearly nine basis points in New York trade to 4.611%, widening their premium over 10-year rates - an unusual phenomenon that reliably signals recession.

U.S. stocks finished flat on Tuesday but S&P 500 futures dropped 0.4% in Asia.

By mid-morning Hong Kong time, MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.3%, led by drops bigger than 1% in Australia and Hong Kong, and analysts were bracing for further falls.

"If I combine this earlier (U.S.) Fed rhetoric trying to keep the rates higher for longer and the recent CPI number...then it seems likely that there should be some degree of moderation in the equity markets, both developed markets and Asian markets," said Manishi Raychaudhuri, head of Asia Pacific equity research at BNP Paribas.

He said the dollar might also regain some strength over emerging market currencies, helped by the prospect of U.S. rates staying elevated.

The dollar touched a six-week high of 133.30 Japanese yen overnight and hovered at 132.80 yen on Wednesday. It had a bumpier ride against other currencies following the CPI data, but seems to be pausing following a January slide.

The dollar index was steady at 103.32. The Australian dollar eased a bit to $0.6959 even as central bank Governor Philip Lowe said rates would need to rise further to contain inflation in remarks to a parliamentary committee.

Oil prices fell as traders worried about mounting supplies and weakening demand. U.S. crude dipped 0.46% to $78.70 a barrel. Brent crude settled down 1.19% to $85.58 per barrel.

Gold was slightly higher. Spot gold traded at $1,854.92 per ounce. Bitcoin clung to an overnight bounce at $22,114.