(Recasts) * U.S., Europe sanctions against China hit shares * Powell to testify on U.S. recovery * Dollar, bonds strengthen as investors seek safety * European shares slip * Global currencies vs. dollar tmsnrt.rs/2PmYOcE LONDON/HONG KONG, March 23 (Reuters) - Shares edged down, bond yields eased and the dollar crept up towards recent peaks on Tuesday with markets in a cautious mood ahead of Congressional testimony by Fed Chair Jerome Powell and Treasury Secretary Janet Yellen later in the day. The STOXX index of 600 European shares was down 0.4%, while the benchmark 10-year German government bond yield dropped 1.9 basis points to -0.3290% as Monday’s plunge in the Turkish lira and lingering concerns over coronavirus infection rates drove investors to safer assets. The dollar firmed and S&P 500 futures were 0.28% lower, with markets turning their attention to an update from Powell. In remarks prepared for delivery to a congressional hearing on Tuesday morning, the Fed chief said the U.S. economic recovery had progressed “more quickly than generally expected”. “The FOMC last week laid out pretty clearly what the Fed’s view is with regard to rates... the next thing that markets will focus on is maybe getting some details from Yellen with regard to further infrastructure investment,” said Alex Wolf head of investment strategy for Asia at J.P. Morgan Private Bank, referring to a statement from the Federal Open Market Committee. MIXED MOOD A mixed bag of new Western sanctions on China, coronavirus concerns and Turkish tumult after President Tayyip Erdogan’s shock sacking of the central bank chief at the weekend left investors awaiting a firmer signal. In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.66%, hurt by a 0.95% fall in Chinese blue chips as a fresh wave of U.S. and European sanctions related to human rights abuses in Xinjiang hit. The fresh sanctions on China prompted an immediate riposte from Beijing against the EU that appeared broader, including European lawmakers, diplomats, institutes and families. Adding to market jitters were further worries over the efficacy of the AstraZeneca Plc vaccine developed with Oxford University after a U.S. health agency said the drugmaker may have included outdated information in its data. Hong Kong’s Hang Seng Index fell 1.62% and there was a tepid market debut for Baidu, which saw the Chinese tech giant’s shares barely trade above their secondary listing price. Japan’s Nikkei fell 0.61%, but emerging markets in the region performed better. Benchmark 10-year U.S. Treasury notes last yielded 1.6505%, down from 1.732% late on Friday. The dollar gained slightly against a basket of six major currencies last trading at 92.019, having slipped 0.32% on Monday, while making advances against the kiwi, Aussie and sterling. The New Zealand dollar hit a three-month low after the government introduced taxes to curb housing speculation, a move investors reckoned could allow the central bank to hold interest rates lower for longer with less risk of a property bubble. Oil also dropped amid ample supply and concerns that new pandemic curbs and slow vaccine rollouts in Europe will slow a recovery in fuel demand. “Global travel is still looking like it could be a while away,” said Matt Stanley, a fuel broker at Star Fuels in Dubai, adding that a second-half recovery in oil demand looked doubtful as lockdowns remain the order of the day. U.S. West Texas Intermediate crude oil futures dropped 1.07% and Brent crude futures dropped by 1.24% to $63.90 per barrel.