Japanese shares led a rebound in Asian markets on Friday, building on the lead from investors on Wall Street snapping up stocks that would benefit most from an economic revival.

The rally interrupted a three-day rout for stocks globally, as market jitters over accelerating U.S. inflation were calmed by Federal Reserve officials reiterating that price pressures from the reopening of the economy would prove transitory.

Tokyo’s Nikkei jumped 2.2%, while MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.8%,

Chinese blue chips rose 1.7%, while Australia’s benchmark rallied 0.8%.

“U.S. equities were up, so there is a bit of relief in Asia,” said Frank Benzimra, head of Asia equity strategy at Societe Generale in Hong Kong.

However, “we certainly are going to have some volatility near-term,” as markets react to CPI and other economic indicators for clues on the path for U.S. monetary policy.

The Fed may open the discussion on tapering its asset purchases as soon as the policy meeting next month, he said.

Data on Wednesday showed annual U.S. consumer prices unexpectedly rose the most in over a decade, prompting markets to wager on earlier policy tightening and sending stock markets tumbling.

However, the reassurance from Fed officials about the transitory nature of inflation has for now stemmed the equities sell-off.

Among Fed speakers overnight, Governor Christopher Waller signalled that rates won’t rise until policymakers either see inflation above target for a long time or excessively high inflation.

“Inflation, it seems, matters less today than yesterday,” Chris Weston, head of research at broker Pepperstone in Melbourne, wrote in a note to clients.

“The buy-the-dip crowd were out in force,” suggesting that recent selling was “a pullback within a bull market,” he said.

S&P 500 futures pointed to further gains of 0.4% when the market reopens, following a 1.2% rally in the index on Thursday. The Dow Jones Industrial Average ended the day up 1.3% and the Nasdaq Composite advanced 0.7%.

The rally was led by shares in small-cap companies, chip makers and transportation providers – businesses that stand to gain as the United States emerges from the pandemic-induced recession.

Benchmark 10-year Treasury yields, which had spiked 7 basis points following Wednesday’s CPI print in the biggest daily rise in two months, fell by nearly 4 basis points overnight and eased further in Asian trading to 1.6539%. [US/]

The U.S. currency was steady against a basket of its major peers, with the dollar index consolidating around the 90.70 level for a second day on Friday, following Wednesday’s 0.6% jump.

Gold traded at around $1,822 an ounce at the end of the week, largely unchanged from the previous day, when it recovered some of Wednesday’s losses.

In cryptocurrencies, bitcoin recovered to just below $50,000 on Friday, after plunging to a 2-1/2-month low of $45,700 in the previous session when a media report of a regulatory probe into crypto exchange Binance added to pressure from Tesla Inc chief Elon Musk’s reversing his stance on accepting the digital currency.

Much smaller rival dogecoin jumped as much as 20% to $0.52 after Musk said on Twitter that he was involved in work to improve the token’s transaction efficiency.

Oil prices remained subdued following a drop on Thursday, pausing a recent rally as investors turned their attention to the coronavirus crisis in India, and as the top U.S. fuel pipeline network resumed operations after being shut due to a cyber attack. [O/R]

Brent crude declined 0.4% to $66.79 a barrel, while U.S. West Texas Intermediate crude slipped 0.3% to $63.62 a barrel.