Asian equities dropped to three-week lows Friday, following a global sell-off as comments from the Fed and the European Central Bank (ECB) had investors still worrying about a Fed rate increase.

Fed chair Janet Yellen told Congress Friday night that recent economic data seem to be backing up the central bank’s expectations of an improved job market. The U.S. non-farm payrolls number for November came in almost exactly in line with the market’s expectations, with 211,000 new jobs compared to the expected number of 200,000. The overall unemployment rate remained unchanged at 5%, and average earnings increased by 0.2% as forecast.

Yellen stated that the bank would proceed cautiously in raising interest rates from near zero and that Fed funds rates would move slowly after the initial increase.

The stock market enjoyed a broad rally on Friday that lifted the S&P 500 (+2.1%) (SPY) back above its 200-day moving average (2,065). The daylong surge helped the benchmark index turn this week’s loss into a slim gain of 0.1%.

China Sentiment Cautious

The Shanghai Composite closed down 59 points or 1.66 percent at 3,525 as investors remained cautious while major banks were also down between 1.2 and 4 percent, with shares in China Construction Bank down 3.9 percent and Chinese finance stocks were in the red, with brokerages seeing losses between 2.2 and 3.6 percent.

According to one analyst at Bank of America Merill Lynch, overall sentiment in China is cautious and that “….data from November will continue to be mixed and suggest risks for growth. Industrial production (IP) and fixed asset investment (FAI) growth could still be sluggish due to the lack of demand pick up amidst poor weather in the month, while retail sales growth data will likely demonstrate the relative resilience in consumption.”