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Asian shares fell on Thursday, while the dollar held near three-month highs and U.S. yields rose as uncertainty over the U.S. election outcome kept markets on edge, though Tesla's forecast-topping earnings provided some comfort for investors.

The combination of higher U.S. Treasury yields, U.S. election uncertainty and growing bets the Federal Reserve may be more restrained in their easing pace capped risk sentiment. Adding to the market nerves is rising expectations of a possible return of Donald Trump to the White House.

Shares of Tesla jumped 12% in after-hours trading after the EV maker reported robust third quarter profits and surprised analysts with a prediction for a 20-30% growth in sales next year.

Nasdaq futures rose 0.5% while S&P 500 futures were 0.2% higher. U.S. stocks had fallen for three straight days with major losses in so called the Magnificent Seven tech stocks ahead of their earnings result. Nvidia, for example, fell almost 3%.

Over in Asia, Tokyo's Nikkei reversed earlier losses to be up 0.2%. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.3%, pressured by falls in Chinese shares.

Hong Kong's Hang Seng index fell 1.3% and China's blue chips dropped 0.8%.

"While the fundamentals are solid and all else being equal will support the continuation of this bull market, the short-term event risk is only now being reflected in asset prices, with traders taking the opportunity to take profits and go to cash," said Kyle Rodda, a senior analyst at Capital.com.

Perhaps, more alarmingly U.S. bond yields keep pushing higher, with the benchmark 10-year Treasury yields now up 16 basis points this week to 4.23%, not far from its three-month high of 4.260%.

While U.S. yields were steady in early Asian trade, regional bonds extended the sell-off, with Australian 10-year bond futures down for a third day to 95.50, the lowest since May.

Tiffany Wilding, PIMCO economist, cautioned investors from reading too much into the recent rise in bond yields, arguing that historical patterns suggest the change in the 10-year yields a month after the Fed's first rat cut has not provided a consistent signal about the magnitude of further cuts.

All the same, strong economic data have led traders to question whether the Fed can afford to be cutting rates too deeply at each of its two remaining meetings this year. Swaps imply just 40 basis points of easing this year.

The higher yields have kept the dollar well supported near its three-month top. It surged 1.1% on the yen overnight, crossing above the key 153 level, but was last at 152.655.

The yen weakened across the board after the Bank of Japan Governor Kazuo Ueda said it was still taking time to achieve the central bank's inflation goal. Both the euro and the Aussie hit three-month highs on the yen overnight. [FRX/]

The rise in the dollar reined in a stellar run in gold prices, which fell more than 1% overnight from its record of $2,758.37 an ounce. It, however, climbed 0.2% on Thursday to $2,723.44.

Oil, which fell on the large build in U.S. crude stocks, recouped some of the losses, with Brent futures up 1% at $75.72 a barrel.