* Fed chair again eases concerns about early tapering
* Yield on 10-year Treasury jumps to 1-year high
* Dow hits record high, big tech still losers
* GameStop (NYSE:GME) more than doubles in price in frenzy trade
* European shares
* Reuters Live Markets blog: LIVE/
By Hideyuki Sano and Echo Wang
TOKYO/MIAMI, Feb 25 (Reuters) - Global stocks jumped on Thursday after U.S. Federal Reserve Chair Jerome Powell reaffirmed interest rates would stay low for a long time, calming market fears that higher inflation might prompt the central bank to tighten monetary policy.
Powell's reassurance gave a fresh impetus to reflation trades and boosted risk asset prices while also driving U.S. bond yields back up to one-year highs.
European stocks are expected to open higher, with Euro Stoxx 50 futures STXEc1 and FTSE futures FFIc1 both up about 0.6%.
In Asia, MSCI's ex-Japan Asia-Pacific shares index .MIAPJ0000PUS rose 1.5% while Japan's Nikkei .N225 gained 1.7%.
Hong Kong's Hang Seng .HSI jumped 1.5% to pare more than half of its previous day's losses following the announcement of a stamp duty hike.
In a second day of testimony in Washington, Powell reiterated the Fed's promise to get the U.S. economy back to full employment and to not worry about inflation unless prices rose in a persistent and troubling way. said it will take three years for them to achieve its inflation target, essentially reaffirming the Fed will not raise interest rates until 2023," said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley (NYSE:MS) Securities.
"A huge amount of cash investors have to work is flowing into the stock market, and that is more than offsetting any negative aspects of higher bond yields."
The prospects of a prolonged period of low interest rates came as investors expect a huge U.S. fiscal stimulus and a progress in COVID-19 vaccinations to shore up the economy, especially the sectors hit the hardest by the pandemic.
The U.S. Food and Drug Administration said on Wednesday Johnson & Johnson (NYSE:JNJ)'s one-dose COVID-19 vaccine appeared safe and effective in trials, paving the way for its approval for emergency use as soon as this week. Wall Street, the Dow Jones average .DJI jumped 1.35% to a record high, outperforming 1.0% gains in tech-heavy Nasdaq .IXIC , as investors rotated into cyclical shares out of flying-tech firms.
In a possible sign of a fresh frenzy in meme shares, GameStop GME.N rose 83.3% in extended trade, building on a gain of 103.9% on Wednesday. bond prices stayed under pressure, boosting their yields to the highest level in a year.
The 10-year U.S. Treasuries yield rose to 1.412% US10YT=TWEB , having hit a high of 1.435% on Wednesday.
"I wouldn't say there is a panic in the bond market. But we have a coronavirus package worthy of $1.5, $1.7 or $1.9 trillion. And in addition, there will be infrastructure spending as well. Investors see few reasons to buy bonds aggressively now," said Takafumi Yamawaki, head of Japan rates research at J.P.Morgan.
A closely watched part of the U.S. yield curve measuring the gap between yields on two- and 10-year Treasury notes US2US10=RR rose to 127.4 basis points, near its 2016 peak of around 136 hit after Donald Trump's surprise election victory.
In the currency market, the safe-haven U.S. dollar languished near three-year lows versus riskier currencies as continued dovish signals from the Fed stoked reflation bets.
The Australian dollar hit a three-year high of $0.7978 AUD=D4 while the Canadian dollar also hit a three-year high of C$1.2503 per U.S. dollar CAD=D4 .
The euro firmed slightly to touch a one-month high of $1.2183 EUR= while the safe-have yen was on the back foot at 105.93 per dollar JPY= .
Investors' strong risk appetite boosted many commodities.
Copper price CMCU3 jumped 3% to its highest level in almost a decade and could log its biggest monthly gains in 15 years.
Crude oil climbed to fresh 13-month highs after U.S. government data showed a drop in crude output as a deep freeze disrupted production last week.
U.S. crude CLc1 rose 0.25% to $63.40 per barrel and Brent LCOc1 was at $67.33, up 0.43% on the day.
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http://tmsnrt.rs/2ihRugV Global asset performance
http://tmsnrt.rs/2yaDPgn Up and away: global bond yields on the rise
https://tmsnrt.rs/3kesTqW
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