Most Asian markets retreated Friday as traders took their foot off the pedal ahead of a much-anticipated earnings season, while an increasingly confident mood on trading floors has analysts predicting the global equities rally still has legs.

While some countries are having trouble with their vaccine programmes and a pick-up in infections, there is a general feeling that governments will get a better hold on the crisis and allow economies to reopen, even if a little later than previously hoped.

Wall Street provided another strong lead, with the S&P 500 chalking up a second successive record and the Nasdaq piling on more than one percent as tech shares regained their mojo, having suffered recent selling.

Federal Reserve boss Jerome Powell again repeated his mantra that the bank would stand fast in its pledge to keep borrowing costs at record lows for as long as needed to support recovery in the world's top economy.

While last week's blockbuster jobs report was welcome, he said the "recovery remains uneven and incomplete" and he wanted to see more of those before he was happy progress was being made.

Analysts said an unexpected rise in jobless claims last week backed up Powell's stance.

There remains a concern that the forecast strong recovery, the reopening of the economy, President Joe Biden's vast spending sprees, and the rollout of vaccines will fan inflation to a point that the Fed will be forced to lift rates earlier than it intends.

Yields on benchmark 10-year Treasuries -- a gauge of future rates -- edged down as Powell spoke, though they remained around a one-year high.

'Kids in a candy store'

Data Friday showed Chinese producer prices rose at their fastest pace in more than two years owing to a jump in the cost of commodities.

That has led to concerns the increases will filter through to the world economy from the export giant, putting pressure on central banks as they try to keep borrowing costs down.

Axi strategist Stephen Innes said the figures "might add a ripple or two of angst to the inflation pacifist calm that has fallen on the market".

Still, he added: "Make no mistake this is a global equity market that is turning exceptionally comfortable with growth driving up yields supported by a Fed that is in absolutely no hurry to tap the brakes.

"The question is, does it get better than this, or are we nearing peak optimism? Or will US stocks remain in 'kids in a candy store mode' while gliding on a sugar rush tailwind from a once-in-a-generation type stimulus effect?"

Hong Kong and Shanghai dropped as traders kept tabs on China-US relations after Washington restricted trade with top Chinese supercomputing centres on security grounds, while lawmakers unveiled legislation to solidify ties with Taiwan and pressure Beijing over alleged theft of intellectual property.

Sydney, Seoul, Mumbai, Singapore, Taipei and Wellington were also lower, though there were gains in Tokyo, Bangkok and Jakarta.

London and Frankfurt dipped in early trade, while Paris was flat.

But Xi Qiao at UBS Global Wealth Management said there would likely be more gains in the pipeline.

"A lot of investors are worried about the stock market highs, but that doesn't mean it can't get higher, and the economic conditions are certainly set up for a positive equity environment," she told Bloomberg TV.

Eyes are now turning to the release of corporate results for January-March, with expectations high that companies are seeing the benefits of the recovery and are hopeful for the outlook.