By Koh Gui Qing and Swati Pandey

NEW YORK/SYDNEY (Reuters) – Asian stocks skidded to one-month lows on Friday as rising U.S. Treasury yields again rattled equity investors while hoisting the dollar to a three-month high, which in turn dragged the Japanese yen.

Energy markets were not spared the volatility either, with oil prices adding to big gains overnight after the Organization of Petroleum Exporting Countries (OPEC) and its allies agreed to mostly maintain their supply cuts in April as they await a more solid recovery in demand from the coronavirus pandemic.

Australian stocks shed more than 1%, Japan’s Nikkei share average dropped 1.6% and shares in Seoul fell 1.4%. Chinese shares were in the red with the bluechip CSI300 index off 1.5%.

That sent MSCI’s broadest index of Asia-Pacific shares outside of Japan to 684.52, the lowest since Feb. 1.

E-Mini S&P futures were 0.5% lower.

U.S. stocks dropped on Thursday after Federal Reserve Chair Jerome Powell disappointed some investors by not indicating that the Fed might step up purchases of long-term bonds to hold down longer-term interest rates.

The tech-heavy Nasdaq Composite tumbled 2.1%, taking it down about 10% from its record close on Feb. 12 and putting it in correction territory.

Even though Powell made it clear that the Fed was not close to changing its ultra-loose monetary policy stance anytime soon, some analysts still worried rising Treasury yields could herald higher borrowing costs, thereby limiting the fragile U.S. economic recovery.

“The market was seemingly looking for Powell to push back harder on the recent increase in yields,” said Ray Attrill, head of forex strategy at National Australia Bank.

“Volatility seen in local interest rate markets yesterday with another large increase in long-term rates and government bond yields has set the scene for a choppy market again today if overnight developments are any guide.”

Bond investors with a bearish view of Treasuries took heart in Powell’s remarks and sold the notes. The yield on 10-year Treasuries climbed above 1.5% to as high as 1.5727%, but still below a one-year high of 1.614% struck last week.

The yield curve, a measure of economic expectations, steepened on rising yields, with the gap between two- and 10-year yields widening by another 6.3 basis points overnight.

Rising Treasury yields bolstered demand for the dollar. The dollar index jumped to a three month high of 91.734.

A stronger dollar hobbled the yen. By early Friday, the yen fell to as low as 107.97, the lowest since July 1 though it pared those losses and was last at 107.85.

The euro was also tripped by a firmer dollar, with the common currency sluggish at $1.1960.

Climbing yields and dollar strength pummeled gold prices, which sank to a nine-month low as investors sold the precious metal to reduce the opportunity cost of holding the non-yielding asset.

Spot gold slid another 0.2% early Friday to $1,692.26 per ounce, trading below $1,700 for the first time since June 2020.

Oil prices extended gains on early Friday after zooming higher overnight.

U.S. crude futures climbed 17 cents, or 0.3%, to $64, holding below a 13-month high hit on Thursday. Brent crude rose 10 cents to $66.84 a barrel.

In the cryptocurrency market, bitcoin was down 4% at $46,422 Friday.

(Reporting by Koh Gui Qing in New York and Swati Pandey in Sydney; Editing by Sam Holmes and Christian Schmollinger)