Asian shares slip on jitters over inflation, interest rates

BANGKOK (AP) — Shares fell Wednesday in Asia as investors weighed the possibility that inflation might prompt central banks to adjust their ultra-low interest rate policies, despite reassurances from the chair of the Federal Reserve.

Hong Kong led the decline, losing 2.7% to 29,809.43. Tokyo's Nikkei 225 shed 1.6% to 29,671.70. In Seoul, the Kospi skidded 2.5% to 2,994.98. Australia's S&P/ASX 200 lost 0.9% to 6,777.80. The Shanghai Composite index gave up 2% to 3,564.44.

India's Sensex bucked the regional trend, gaining 0.4% to 49,960.05. Singapore also gained while other regional benchmarks declined.

Hong Kong's government announced pandemic relief measures worth $15.4 billion to help the territory recovery from the blow to its economy, which contracted 6.1% last year. The measures include loans for the unemployed, consumption vouchers and tax relief. Hong Kong Finance Minister Paul Chan forecast the economy is set to grow 3.5% to 5.5% this year.

Investors remain increasingly focused on a big tick up in bond yields and how it affects stock valuations.

The large amount of stimulus being pumped into economies has been a factor in pushing bond yields higher, giving some investors pause as it revives worries about inflation that have been nearly nonexistent for more than a decade.

The yield on the 10-year Treasury note, which has climbed recently, was steady at 1.33% on Wednesday.

When bond yields rise, stock prices tend to be negatively impacted because investors turn an increasingly larger portion of their money toward the steadier stream of income that bonds provide.

Federal Reserve Chair Jerome Powell told Congress Tuesday the Fed didn’t see a need to alter its policy of keeping interest rates ultra-low, noting that the economic recovery “remains uneven...