The 28-year-old son of a fisherman topped the leaderboard at 13-under-par 129, one shot ahead of Zaw Moe of Myanmar, who fired a 64 in perfect scoring conditions at Hong Kong Golf Club.
Of the 80 players who survived the 36-hole cut - which fell at 3-under 139 - 68 shot in the 60s in the second round. Twenty-seven golfers were 5-under-par or better for the day.
Defending champion Simon Dyson of England, whose win a year ago propelled him to the Davidoff (Asian PGA) Tour Order of Merit title, had a 64 to finish in a six-way tie for third place at 11-under.
Yeh, two strokes back after one round, quickly rebounded from his first-hole stumble with birdies at the second, third and fourth. He added a birdie at the eighth to make his way out in 2-under 33.
'I got really angry when I double-bogeyed my first hole with a three-putt,' Yeh explained. 'It made me play harder and it was good to bounce straight back with three successive birdies. That got me going and on the back nine, I played really well.'
Although he wiped out a birdie at the 10th with a bogey at 11, Yeh fashioned an eagle at the par-5 12th to make it to 9-under. Four birdies over the final six holes lifted him to the top spot and put him in position to capture his second title in a tournament co-sanctioned by the European and Davidoff Tours.
Check out Yeh's nine-birdie, one-eagle scorecard
'My putting was just brilliant and this 63 is my lowest round as a professional,' said Yeh, who won the 2000 Malaysian Open. 'However, I'm not going to think too far ahead and will take things a shot at a time. I've played pretty average this season.'
Yeh, second to Dyson on the 2000 Davidoff money list, is ranked 25th on that tour's money list this year.
Moe, 34, a Singapore-based golfer with five top-10 finishes in Japan this year, began on the back nine and made his way around the 6,697-yard par-71 layout without a bogey for the second straight day. The big-hitter birdied seven holes, including all three par-5s.
'I holed out from the edge of the green on 11 and that got me going,' he said.
Alongside Dyson at 131 were Swedes Anders Forsbrand (64) and Carl Pettersson (64), 2001 Challenge Tour money-leader Mark Foster (65), Ryder Cupper Paul McGinley (66) of Ireland and first-round leader Adam Scott (67).
Scott, who opened with a 64 Thursday, racked up five birdies against a single bogey in round 2, but feels he'll need to shoot lower to keep up over the weekend.
'The scoring's going to be really good around here, so I've got to hang in there and try to get back to playing well like I did yesterday,' said the 21-year-old Australian. 'I missed a lot of greens and scrambled really well to only drop one shot.'
Two-time Masters champion Jos Maria Olazbal finished at 8-under after a 69, while Michael Campbell's 69 saw the New Zealander move to within six of the lead at 7-under.
Check out full-field scores from the Omega Hong Kong Open