Asian shares wallowed near six-week lows on Wednesday, bruised by a fall in oil prices on renewed worries about a supply glut and as investors grew nervous about the diminishing capacity of the world's major central banks to shore up economic growth.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.3 per cent in early trade, extending its decline since late last week to 4.4 percent, while Japan's Nikkei dropped 0.7 per cent.

On Wall Street, S&P 500 Index lost 1.48 per cent to 2,127.02, a two-month low. Although it has managed to hold above its 200-day moving average, which stood at 2,121, a break of that level could sap market confidence.

The energy index's 2.86-percent slide led declines as oil prices tumbled as much as 3 per cent after both the IEA, the world's energy watchdog, and OPEC said the global crude glut would persist for much longer than expected.

Brent crude futures last stood at $47.35 per barrel in Asia, up 0.5 per cent from the previous close but still down 1.4 per cent on the week.

Investors were also unnerved by a sharp rise in long-term global bond yields.

The 10-year US Treasuries yield rose to a three-month high of 1.752 percent, having risen more than 20 basis points from a week ago.

The rise in US bond yields came even as expectations on the Federal Reserve's monetary policy outlook hardly changed.

US interest rate futures are pricing in about 10 per cent chance of a rate hike at next week's policy review and about 60 percent chance by December.

While the rise in US bond yields was in part due to heavy Treasury and corporate debt supply, it also reflected concerns about global central bank policy.

Bond markets have come under pressure in recent days from unease about a possible US rate hike this month, news that the Bank of Japan is studying ways to steepen the bond yield curve and disappointment at the lack of clear forward-action plan by the European Central Bank at last week's meeting.

Jeffrey Gundlach, chief executive officer of DoubleLine Capital, said on Tuesday that long-term decline in global bond yields is over and investors are watching out for a likely fiscal expansion in the world's major economies where monetary stimulus has reached its limits.

German bond yields on Tuesday hit their highest levels since June's shock vote by Britain to leave the European Union,

"It started after the ECB gave a cold shoulder to the idea of further easing. I think the ECB will eventually ease in December but given fragile sentiment, we could see more sell-off if a couple of Bank of England policy makers say the BoE do not need further easing," said Hiroki Kishida, fixed income analyst at Nomura Securities.

The Bank of England holds its policy meeting on Thursday and is expected to stay on hold, after having cut interest rates to record lows and reintroduced an asset-purchase programme last month.

The prospects of a US rate hike by the year-end helped to underpin the dollar against other currencies.

The euro dipped to $1.12, a slight decline on the day and the week while the dollar also gained to 102.46 yen from Tuesday's low of 101.42 yen.

The yen was also dented by a Nikkei newspaper report that the Bank of Japan plans to make its controversial negative interest rate policy the centrepiece of future monetary easing.

Short-dated Japanese bond yields fell, with the five-year JGB yield slipping 2.5 basis points to minus 0.200 per cent while the two-year yield fell 2.0 basis point to hit a six-week low of minus 0.265 per cent.

Expectations that the BOJ may try to engineer a steeper yield curve has hurt long-term paper.

Longer-dated yields continued to take a hit, with the 20-year yield rising 5.0 basis points to 0.490 per cent, hitting a six-month high. - Reuters