Shares slip in Asia after bond yield spike hits Wall St

FILE - In this Nov. 16, 2020 file photo a man wearing a mask passes the New York Stock Exchange in New York. Stocks are moving modestly higher in early trading on Wall Street as investors cautiously welcome signs of calm in the bond market. The S&P 500 was up 0.4% early Thursday, March 4, 2021, and the yield on the 10-year Treasury held steady at 1.47%.  (AP Photo/Mark Lennihan, File)
FILE - In this Nov. 16, 2020 file photo a man wearing a mask passes the New York Stock Exchange in New York. Stocks are moving modestly higher in early trading on Wall Street as investors cautiously welcome signs of calm in the bond market. The S&P 500 was up 0.4% early Thursday, March 4, 2021, and the yield on the 10-year Treasury held steady at 1.47%. (AP Photo/Mark Lennihan, File) (Copyright 2020 The Associated Press. All rights reserved)

Asian shares slipped Friday after surging U.S. bond yields renewed pressure on high-flying technology companies.

Tokyo’s Nikkei 225 index dropped as much as 2% and shares fell in most other markets.

Investors were disappointed with remarks by Federal Reserve Chair Jerome Powell on Thursday when he said inflation will likely pick up in the coming months, though he cautioned that the increase would be temporary and would not be enough for the Fed to alter low-interest rate policies set to help the economy recover from the pandemic.

Powell did not indicate the Fed might seek to rein in rising bond yields, which tend to draw money out of stocks into less risky bonds.

Investors were hoping for “a little more hand holding" from Powell, Stephen Innes of Axi said in a commentary. “Powell is doing the bare minimum here while simultaneously hinting at a lift-off level that could be a lot nearer on the horizon than suspected only a few weeks ago."

That angst has spilled into world markets that have thrived on massive monetary stimulus from the world's central banks.

Japan's Nikkei 225 lost 0.8% to 28,692.08 while the Hang Seng in Hong Kong gave up 0.4% to 29,133.40. South Korea's Kospi shed 0.6% to 3,024.40 while the S&P ASX 200 sank 0.9% to 6,699.00.

The Shanghai Composite index fell 0.3% to 3,491.69 as Chinese Premier Li Keqiang announced an annual growth target of “over 6%" at the opening of the annual session of the ceremonial national legislature. Investors are watching for any changes in policy direction from the National People's Congress, in particular moves to rein in government spending or tighten monetary policy that might affect markets.