"Asia's tight trade and financial links to the U.S. make it susceptible to changes in U.S. monetary conditions. Asian markets tend to react negatively during U.S. monetary tightening cycles," it said.

Asian equity indices declined 30 percent peak-to-trough on average during the 1994 and 1999 U.S. rate hike cycles.

Asian stocks shed around 15 percent  during the 2004 tightening campaign, and by a similar amount after the Fed's first two rounds of quantitative easing after 2008.

"Recent stress in Asian equity markets indicates that the impact of the U.S. policy remains significant," the report said.

Domestic equities declined 27 percent in 1994 and 24 percent in 1999 during the rate hike cycle of the U.S.

After the end of first round of qualitative easing by the U.S., domestic equities declined 3 percent while after the end of the second round quantitative easing, there was a significant fall of 18 percent.

The recent talks of the Fed tapering the third round of quantitative easing has made domestic equities dip by 6 percent, the report said.

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