Japan and Hong Kong led a jump in regional stocks on Thursday, joining a rally on Wall Street overnight as potential risks from Federal Reserve monetary tightening to the Ukraine war and a slowdown in China became less murky.

Treasury yields eased a little after spiking to nearly three-year highs overnight – with shorter-end yields rising more to flatten the curve – after the Fed raised the policy rate for the first time since 2018. The Fed increased rates by an as-expected quarter point and telegraphed equivalent hikes at every meeting for the remainder of this year to aggressively stamp out inflation.

The safe-haven dollar, though, remained on the back foot and oil also stabilized well south of recent multi-year highs amid signs of material progress in talks between Russia and Ukraine to end a three-week-old invasion that Moscow says is a “special military operation” to demilitarize its neighbor.

Meawhile, investor concerns about a sharp slowdown for China, which is battling a spreading COVID-19 outbreak with ultra-restrictive measures, were assuaged on Wednesday after Vice Premier Liu He signalled more stimulus to support markets.

Japan’s Nikkei soared 3.0% and touched a two-week high in Thursday’s session, while South Korea’s Kospi jumped 1.6% and Australia’s benchmark added 1.4%.

Chinese blue chips gained 2.1%, and Hong Kong’s Hang Seng surged 5.2%.

An MSCI index of regional shares rallied 2.5%.

U.S. stock futures pointed to a 0.3?cline at the restart, but following a 2.2% surge for the S&P 500 overnight.

Stocks stayed strong despite the Fed’s more hawkish tilt because Chair Jerome Powell “emphasised that the economy was strong enough to withstand hikes, saying he wasn’t concerned by the possibility of a recession,” National Australia Bank economist Taylor Nugent wrote in a client note.

“Glimmers of progress” in ongoing Russia-Ukraine peace talks had already lifted market sentiment, along with comments from Chinese officials that the response to the current COVID surge will be coordinated with efforts to support economic growth and capital markets, Nugent said.

Australian and Japanese government bond yields rose on Thursday, tracking a jump in U.S. Treasury yields overnight.

The two-year Treasury yield hit 2.002?ter the Fed decision before easing to 1.9235% in Tokyo trading, while the 10-year yield jumped to 2.2460% and then eased to 2.1545% on Thursday. Both levels were the highest since May 2019.

The safe-haven greenback was out of favor though amid the improvement in market sentiment, and while the outcome of the Fed meeting was on the hawkish side, analysts saw it as within the bounds of market expectations.

The dollar index, which tracks the currency against six major peers, remained weak, slipping an additional 0.12% to 98.360 after declining 0.47% on Wednesday.

Crude oil ticked higher on Thursday after the International Energy Agency (IEA) said a decline in oil demand due to higher prices would not offset a shut-in of Russian oil supplies, but not enough to offset the declines of the previous day.

Brent crude futures were up about 66 cents, or 0.67%, to $98.68 a barrel, compared with a recent peak of $129.30. U.S. West Texas Intermediate (WTI) crude was up 84 cents, or 0.86%, to $95.86 a barrel, versus a top earlier this month of $124.58.