SHANGHAILONDON Reuters The dollar neared its yearhigh and bonds rallied further on Wednesday, as the rapid spread of the Delta coronavirus variant displaced inflation as investors primary concern and sent them rushing for safehaven assets.

European stocks also rose ahead of a European Central Bank meeting on Thursday that is expected to convey a dovish tone, with the benchmark STOXX index of the regions 600 largest shares up 0.9.

Last week, data showing a surge in U.S. consumer prices in June had sparked fears that the Federal Reserve could bring a quicker end to emergency stimulus measures.

The shift from a debate over whether price spikes are transitory to outright fear of the impact of the latest COVID19 surge had pushed the U.S. 10year yield down more than 20 basis points in the space of a week as investors have moved into safehaven assets.

The SP 500 slumped nearly 4 from highs last Wednesday to lows on Monday before rebounding.

The more positive mood in European shares on Wednesday contrasted with a 0.13 fall in MSCIs broadest index of AsiaPacific shares outside Japan, as South Korea reported a daily record of new infections.

Seouls KOSPI slid 0.52 and Hong Kongs Hang Seng index fell 0.4.

Japans Nikkei was 0.6 higher after touching sixmonth lows a day earlier, as investors bought cyclical stocks ahead of a long weekend that will mark the start of the Tokyo 2020 Olympics and as a jump in exports in June boosted hopes for an exportled economic recovery….