GLOBAL MARKETS-World shares jump after Powell nixes rate hike fears

* Fed chair again eases concerns about early tapering
* Yield on 10-year Treasury jumps to 1-year high
* Dow hits record high, big tech still losers
* GameStop more than doubles in price in frenzy trade
* European shares
* Reuters Live Markets blog: LIVE/

By Hideyuki Sano and Echo Wang
TOKYO/MIAMI, Feb 25 (Reuters) - Global stocks jumped on
Thursday after U.S. Federal Reserve Chair Jerome Powell
reaffirmed interest rates would stay low for a long time,
calming market fears that higher inflation might prompt the
central bank to tighten monetary policy.
Powell's reassurance gave a fresh impetus to reflation
trades and boosted risk asset prices while also driving U.S.
bond yields back up to one-year highs.
European stocks are expected to open higher, with Euro Stoxx
50 futures STXEc1 and FTSE futures FFIc1 both up about 0.6%.
In Asia, MSCI's ex-Japan Asia-Pacific shares index
.MIAPJ0000PUS rose 1.5% while Japan's Nikkei .N225 gained
1.7%.
Hong Kong's Hang Seng .HSI jumped 1.5% to pare more than
half of its previous day's losses following the announcement of
a stamp duty hike.
In a second day of testimony in Washington, Powell
reiterated the Fed's promise to get the U.S. economy back to
full employment and to not worry about inflation unless prices
rose in a persistent and troubling way. "Powell said it will take three years for them to achieve
its inflation target, essentially reaffirming the Fed will not
raise interest rates until 2023," said Norihiro Fujito, chief
investment strategist at Mitsubishi UFJ Morgan Stanley
Securities.
"A huge amount of cash investors have to work is flowing
into the stock market, and that is more than offsetting any
negative aspects of higher bond yields."
The prospects of a prolonged period of low interest rates
came as investors expect a huge U.S. fiscal stimulus and a
progress in COVID-19 vaccinations to shore up the economy,
especially the sectors hit the hardest by the pandemic.
The U.S. Food and Drug Administration said on Wednesday
Johnson & Johnson's one-dose COVID-19 vaccine appeared safe and
effective in trials, paving the way for its approval for
emergency use as soon as this week.
On Wall Street, the Dow Jones average .DJI jumped 1.35% to
a record high, outperforming 1.0% gains in tech-heavy Nasdaq
.IXIC , as investors rotated into cyclical shares out of
flying-tech firms.
In a possible sign of a fresh frenzy in meme shares,
GameStop GME.N rose 83.3% in extended trade, building on a
gain of 103.9% on Wednesday. U.S. bond prices stayed under pressure, boosting their
yields to the highest level in a year.
The 10-year U.S. Treasuries yield rose to 1.412%
US10YT=TWEB , having hit a high of 1.435% on Wednesday.
"I wouldn't say there is a panic in the bond market. But we
have a coronavirus package worthy of $1.5, $1.7 or $1.9
trillion. And in addition, there will be infrastructure spending
as well. Investors see few reasons to buy bonds aggressively
now," said Takafumi Yamawaki, head of Japan rates research at
J.P.Morgan.
A closely watched part of the U.S. yield curve measuring the
gap between yields on two- and 10-year Treasury notes
US2US10=RR rose to 127.4 basis points, near its 2016 peak of
around 136 hit after Donald Trump's surprise election victory.
In the currency market, the safe-haven U.S. dollar
languished near three-year lows versus riskier currencies as
continued dovish signals from the Fed stoked reflation bets.
The Australian dollar hit a three-year high of $0.7978
AUD=D4 while the Canadian dollar also hit a three-year high of
C$1.2503 per U.S. dollar CAD=D4 .
The euro firmed slightly to touch a one-month high of
$1.2183 EUR= while the safe-have yen was on the back foot at
105.93 per dollar JPY= .
Investors' strong risk appetite boosted many commodities.
Copper price CMCU3 jumped 3% to its highest level in
almost a decade and could log its biggest monthly gains in 15
years.
Crude oil climbed to fresh 13-month highs after U.S.
government data showed a drop in crude output as a deep freeze
disrupted production last week.
U.S. crude CLc1 rose 0.25% to $63.40 per barrel and Brent
LCOc1 was at $67.33, up 0.43% on the day.

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Emerging markets http://tmsnrt.rs/2ihRugV
Global asset performance http://tmsnrt.rs/2yaDPgn
Up and away: global bond yields on the rise https://tmsnrt.rs/3kesTqW
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