U.S Treasury bonds are considered safer and hence their higher yields tend to dissuade global investors from putting money in risk assets such as Asian equities.
The MSCI's broadest index of Asia-Pacific shares gained about 1.4% in last month, its smallest gain in four months. The index was trading at a forward 12-month price-to-earnings ratio of 17.42 at the end of January, the highest since September 2009.
Graphic: Foreign investments in Asian equities
Among the regional markets, Taiwan and South Korea witnessed the biggest net sales, with outflows of $4.4 billion and $1.8 billion respectively.
Philippine, Vietnam and Thailand also faced some outflows last month.
Renewed virus outbreaks also depressed manufacturing activity in some parts of the region, which affected the sentiment last month, analysts said.
Six out of the nine reporting economies in the region posted a decline in manufacturing activity in February, said Oxford Economics in a report.
"But we expect a broad-based pick-up in growth momentum over the course of the year, supported by vaccine rollouts, staggered policy normalisation and an improved global backdrop," it said.
However, Indian equities lured an inflow of $3.5 billion, helped by a growth-focused and high-spending federal budget unveiled at the start of February.
India's economy expanded by 0.4% year-on-year in the October-December quarter, returning to growth after shrinking for two straight quarters, government data showed last month.
(Reporting by Patturaja Murugaboopathy and Gaurav Dogra in Bengaluru; Editing by Shailesh Kuber)
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