MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3%, China’s CSI300 dropped 0.6% while Japan’s Nikkei shed 1.1%

Asian stocks dipped and cryptocurrencies extended losses on Wednesday as uncertainties over inflation prompted investors to reduce exposure to riskier assets for now.

Also weighing on digital coins was a new Chinese ban on financial institutions providing services related to cryptocurrency transactions.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3% though Hong Kong and South Korea are closed for holiday.

Mainland China’s CSI300 dropped 0.6% while Japan’s Nikkei shed 1.1%.

Wall Street stocks dropped late in the session to end lower on Tuesday, unable to sustain gains made after bumper earnings from Walmart and Home Depot.

The S&P 500 shed 0.85%, with telecom shares leading the decline, while the Nasdaq Composite fell 0.56%.

Now that investors are pre-occupied with inflation, they are probably reluctant to make big decisions until they see a clearer picture, said Hirokazu Kabeya, chief global strategist at Daiwa Securities.

Inflation worries will keep markets uncertain for now, even though I don’t expect stock prices to collapse given economic re-openings, Kabeya said.

The Federal Reserve has stuck to the narrative that a recent rise in inflation would be transient and that it therefore should keep its easy monetary policy settings.

The minutes from the Fed’s April meeting, to be published late on Wednesday, are expected to repeat that message.

Inflation remains the biggest theme, whether it is real and whether the Fed may need to change its policy because of that, said Kazushige Kaida, head of forex sales at State Street Bank’s Tokyo branch. At the moment, markets are putting faith, after a fashion, in the Fed’s narrative.

Yet an unexpected pickup in consumer inflation and signs of a labour shortage in the US has prompted investors to dump assets that had risen sharply over the past year.

Some commodities that have benefited from reflation trade have also lost steam, with U.S. lumber futures dropping nearly 25% in the last three sessions.

U.S. crude futures declined 0.9% to $64.9 per barrel while Brent futures shed 0.9% to $68.12 per barrel.

That helped to slightly ease inflation worries in the bond market.

Ten-year U.S. inflation priced in the U.S. bond markets, based on the yield gap between inflation-protected bonds and conventional ones , ticked down to 2.55% from an eight-year high of around 2.58% hit earlier this month.

The yield on 10-year U.S. Treasuries, or the nominal yield, stood little changed at 1.664%.