On Wednesday, global stock markets hit a new high as bond yields fell after data showed that US inflation was not rising at an astronomical pace. Most Asia-Pacific stock indexes rose in tandem with Wall Street, with Hong Kong's Hang Seng leading the way, while US Treasury yields continued to fall, hitting a new three-week low. With 100 days before Tokyo is set to stage the Olympics, Japan defied expectations, with the Nikkei dropping 0.4 % as rising coronavirus cases posed concerns about an economic reopening.

As rising vaccines and fiscal stimulus unleashed pent-up demand, the US consumer price index rose 0.6 percent, the most since August 2012. However, the information is unlikely to convince Federal Reserve Chair Jerome Powell that higher inflation in the coming months would be only temporary.

Powell is expected to talk at the Economic Club of Washington later in the day.

In a client note, Westpac strategists wrote, “The market strongly geared up for higher CPI readings.”

The outcome on Tuesday was "evidently interpreted within the scope of the Fed's pledge to look beyond 'transitory' inflation impulses. The issue for bond markets is whether the benchmark yield will break below 1.6 % after falling as low as 1.611 % on Wednesday. That was a key technical standard, and if it was broken, we might see a fast jump to 1.5 %," Westpac strategists said.

The 10-year U.S. Treasury yield had risen from the beginning of the year to a 14-month high of 1.776 % on March 30 on bets that massive fiscal stimulus would prolong the rebound in the U. S., resulting in higher inflation than Fed policymakers expect.

However, yields have dropped this month, owing to the Federal Reserve's insistence that labor market uncertainty would keep the economy from malfunctioning. A string of successful auctions, including the sale of 30-year bonds on Tuesday, has also helped to keep returns in check.

Outside of Japan, MSCI's broadest index of Asia-Pacific stocks rose 0.6 percent. The Hang Seng in Hong Kong increased by 1.3 %, while China's blue-chip index increased by 0.7 %.

MSCI's index of 50 countries' equity results rose 0.15 %, extending its all-time high. Bond yields dropped overnight; lifting US tech stocks such as Apple Inc. Microsoft Corp, and Amazon.com Inc. the global benchmarks top three holdings. The S&P 500 increased 0.33 %, setting intraday and closing peaks, while the Nasdaq Composite increased 1.05 %. The Dow Jones Industrial Average fell 0.2%.

Following the discovery of six women who developed unusual blood clots, US federal health agencies advised stopping the introduction of Johnson & Johnson's Covid-19 vaccine for at least a few days. Vaccine rollout setbacks have sparked questions about the global economy's recovery.

JPMorgan Chase & Co. and Goldman Sachs Group Inc. are among the companies announcing earnings on Wednesday. Along with Treasury yields, the US dollar fell to a three-week low against major counterparts.

Gold, a conventional inflation hedge, rose from its lowest point in a week to trade around $1,745 on the spot market. On same the day Coinbase shares are set to sell in the US, Bitcoin reached a new high of $63,860, expanding its 2021 rally to greater levels.