Asian equities rose early on Thursday after the Federal Reserve sounded more dovish than many had expected and led investors to push back their expected timing of a rate hike, while the dollar was put on the defensive on the same token. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS climbed 0.3 percent. South Korea’s Kospi .KS11 rose 0.7 percent, while Japan’s Nikkei .N225 dipped 0.1 percent on the yen’s gains against the dollar.
Wall Street shares inched higher in a choppy session overnight following the Fed’s statements, with the Dow .DJI rising 0.17 percent and S&P .SPX gaining 0.2 percent. After a closely-watched two-day meeting, the Fed said the economy was likely strong enough to support an interest rate increase by the end of the year. But it lowered its expectations for 2015 economic growth because of a weak start to the year and reduced its growth and federal funds rate forecast.
The Fed’s stance disappointed those in the financial markets who had expected the central bank to signal a rate hike at an earlier juncture like September. U.S. Treasury yields, which had reached eight-month highs last week, promptly fell. Lower debt yields weighed on the dollar, which dropped against a wide range of its peers.