Singapore’s benchmark stock index jumped, leading gains in the Asia Pacific region, after the city state’s many cyclical stocks got a jolt from a surge in US Treasury yields.

The Straits Times Index rallied as much as 2.1%, the most in more than two months, topping the 0.3% gain in the MSCI Asia Pacific Index. The advance was led by beaten-down shares in the banking, travel and property sectors.

Singapore’s equity market has been the region’s second-worst performer this year, as a shutdown in business activity wreaked havoc on an economy heavily exposed to trade and supply chains. Large financial stocks, which have been a drag, were among the top gainers on Friday. Banks account for more than 40% of benchmark index weight, and a rise in yields is seen as boosting their interest margins.

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“No surprise Singapore is the best performing market today after the drift in U.S. rates over night,” said Adrian Zuercher, co-head of global asset allocation at UBS Group AG’s wealth management arm. “Our biggest overweight is Singapore, which tends to be financial heavy and will benefit from higher nominal interest rates.”

DBS Group Holdings Ltd. and Oversea-Chinese Banking Corp. climbed at least 2.4% each.

Singapore Airlines Ltd., the worst performer on the benchmark index this year, was the top gainer, rallying as much as 4.1%. The carrier is “doing well in managing the situation,” Singapore’s Trade & Industry Minister Chan Chun Sing said in a Bloomberg TV interview on the day, adding that Singapore plans to progressively open links with the rest of the world.

He also said officials are “quietly confident” in the city-state’s economic recovery through year-end. The economy witnessed a record 13.2% year-on-year contraction in the second quarter.

Treasury yields continued to climb in Asia after rising in the U.S. session as Federal Reserve Chairman Jerome Powell announced a shift to a more relaxed approach on inflation. The yield curve steepened to the widest in two months, boosting cyclical stocks globally. The Singapore dollar held near a seven-month high as the country’s interest-rate swap curve bear-steepened.