The anti-Asian sentiment in Canada and the U.S during the coronavirus disease (COVID-19) pandemic centers on perceptions of East and Southeast Asians as “health hazards”, due to their alleged animal-eating habits, uncleanliness, and tendency to spread diseases. In a preregistered study, we demonstrated that for East and Southeast Asians in Canada and the U.S., their belief that society holds the Asian health hazard stereotype was associated with higher distress and lower life satisfaction. No differences were observed between East and Southeast Asian Americans (n = 352) and Canadians (n = 351), as well as Chinese and non-Chinese participants. Importantly, these effects were robust to pandemic- and discrimination-related stressors. We also demonstrated that Asian health hazard and perpetual foreigner stereotypes were psychometrically distinct. Overall, our findings highlight how perceptions of negative societal views, particularly those reminiscent of the Yellow Peril narrative, are uniquely associated with psychological well-being among East and Southeast Asian Americans and Canadians.