GLOBAL MARKETS-Rising bond yields spook world shares as investors look to Powell

* Bond worries resurface ahead of Powell's comments later in
day
* Asian shares fall 1.8%, Nasdaq futures hit 2-month low
* Dollar hits 7-month high against yen, 4-month high vs
Swissie

By Hideyuki Sano
TOKYO, March 4 (Reuters) - Resurgent worries about rising
U.S. bond yields hit global shares on Thursday as investors
waited to see if Federal Reserve Chair Jerome Powell will
address concerns about the risk of a rapid rise in long-term
borrowing costs.
The spectre of higher U.S. bond yields also undermined
low-yielding, safe-haven assets, such as the yen, the Swiss
franc and gold.
Benchmark 10-year U.S. Treasuries rose to 1.477% US10YT=RR
as investors bet U.S. inflation could pick up as an economic
recovery gathers steam, driven by government stimulus and
further progress in vaccination programmes.
"It is not clear how the Fed wants to deal with bond
yields," said Hirokazu Kabeya, chief global strategist at Daiwa
Securities.
"The pace of rises in yields has been far faster than most
people have expected and there's speculation the authorities may
be starting to think about tightening their policy."
The MSCI's ex-Japan Asian-Pacific shares .MIAPJ0000PUS
lost 1.7% in early trade while Japan's Nikkei .N225 fell 1.9%.
E-mini S&P futures EScv1 slipped 0.4% while the futures
for the Nasdaq, the unequivocal leader of the post-pandemic
rally, fell 0.6% NQcv1 to a two-month low.
Tech shares are vulnerable because their lofty valuation has
been supported by expectations of a prolonged period of low
interest rates.
Powell is due to speak at 12:05 p.m. EST (1705 GMT). Many
Fed officials have downplayed the rise in Treasury yields in
recent days, although Fed Governor Lael Brainard on Tuesday
acknowledged concerns over the possibility a rapid rise in
yields could dampen economic activity.
The market will have to grapple with a huge increase in debt
sales after rounds of stimulus to deal with a recession
triggered by the pandemic.
The issue is not limited to the United States, with the
10-year UK Gilts yield jumping back to 0.779% GB10YT=RR , near
its 11-month high of 0.836% hit last week, after the government
unveiled much higher borrowing. Currency investors continued to snap up dollars as they bet
on a U.S. economy outshining its peers in the developed world in
coming months. USD/
The dollar rose to a seven-month high of 107.16 yen JPY= .
"U.S. dollar/yen has been on a one-way trajectory since the
start of 2021," said Joseph Capurso, head of international
economics at the Commonwealth Bank of Australia.
"The brightening outlook for the world economy is a positive
for both U.S. dollar/yen and Australian dollar/yen."
Other safe-haven currencies were soft, with the Swiss franc
flirting with a four-month low against the dollar CHF= and a
20-month trough versus the euro EURCHF= .
Gold hit a nine-month low of $1,702.8 per ounce XAU=
on Wednesday and last stood at $1,711.5.
Other major currencies were little moved, with the euro flat
at $1.2054 EUR= .
Investor focus on a U.S. economic rebound was unshaken by
data released overnight that showed the U.S. labour market
struggling in February, when private payrolls rose less than
expected. Oil prices rose for a second straight session early on
Thursday, as the possibility that OPEC+ producers might decide
against increasing output at a key meeting later in the day
underpinned alongside a drop in U.S. fuel inventories. O/R
U.S. crude CLc1 rose 0.3% to $61.44 per barrel.

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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
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