LIVE MARKETS-Diplomacy takes a back seat

Woes in the US Treasuries market manifested in Japan, which returned from a three-day trading break to see its benchmark government bond yield surge to a 30-year high.

Rubber futures in Japan jumped to a 15-year high. Shares in Asia were broadly lower, except for Japan's Nikkei .N225 gauge, which got a boost from a weaker yen JPY=.

Central bankers around the globe have maintained a hawkish tone as rising oil prices drive inflation. Federal Reserve Governor Michael Barr on Wednesday signalled more interest rate hikes may be needed, and markets are anticipating speeches from other Fed officials on Thursday, including New York Fed President John Williams and Cleveland Fed President Beth Hammack.

On the economic data front, the US Labor Department is expected to report that initial jobless claims likely rose to 201,000 in the week ended September 19, while continuing claims likely increased by 15,000 to 1.745 million in the previous week. New US home sales are forecast to edge up to 615,000 units in August from 607,000 units in July.