Fears over the spread of the Delta strain of the coronavirus weighed on Asian equities, even as subdued U.S. inflation soothed fears the Federal Reserve would rush to cut its economic support.

The dollar fell against most major currencies and US Treasury yields fell overnight as a result of the data, though both were more stable in Asian hours.

In early trade, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.25 percent, pulled down by a 0.24 percent slide in Chinese blue chips. The Hong Kong benchmark dropped 0.2 percent, while Australian stocks were mostly unchanged and Japan’s Nikkei jumped 0.35 percent.

Stock futures in the United States were barely changed, with S&P 500 e-minis down 0.02 percent.

Asian benchmarks’ poor performance contrasts with the situation elsewhere in the world. The MSCI all-country index, which measures stocks around the world, hit a new high on Wednesday.

In comparison, the Asian benchmark has dropped more than 10% from its February high.

“The money is just in the U.S. and European markets right now, and that’s our preferred market too,” said Daniel Lam, senior cross-asset strategist, Standard Chartered Wealth Management.

Lam pointed to a strong U.S. earning season and Europe’s high vaccination rates meaning the pace of reopening has been less harmed by the spread of the Delta variant of the new coronavirus, and “recent China regulation blues” in sectors such as education and technology.

“I think that the rotation from emerging markets to Western markets could continue in the near-term,” said David Chao, Global Market Strategist, Asia Pacific (ex-Japan) at Invesco.

“The APAC region’s zero-tolerance policy coupled with a relatively low vaccination rate has led to vicious lockdown-release cycle which could continue for a while.”

The Dow Jones Industrial Average and S&P 500 closed at record levels on Wednesday, after the U.S. Labor Department reported the largest drop in month-to-month inflation in 15 months, easing concerns about the potential for runaway inflation.

U.S. policymakers are publicly discussing how and when they should begin to trim the massive asset purchases launched by the Fed last year to stabilize financial markets and support the economy through the coronavirus pandemic.

The easing of fears about inflation reduces the pressure to taper those asset purchases soon rather than later in the year, after strong employment figures last week had given ammunition to those with a more hawkish tilt.

As a result, U.S. Treasury yields fell on Wednesday across most maturities, though trading was choppy.

Moves were more muted in Asian hours. Yields on benchmark 10-year Treasury notes was last 1.3455% compared with its U.S. close of 1.359%.

The dollar hovered below a four-month peak against major peers on Thursday, after retreating overnight as yields dropped.

“I expect the dollar to be range-bound on the recent strong unemployment and tempered CPI data,” said Invesco’s Chao.

Oil largely held onto gains from earlier in the week, U.S. crude dipped 0.03% to $69.23 a barrel. Brent crude was flat at $71.43 per barrel.

Gold also held on to overnight gains on Thursday, with the spot price down 0.1% having risen 1.3% in the previous session. Easing of fears about higher interest rates would typically help the non-interest bearing asset.