Asian stocks cheer dovish Fed, hit four-month highs

Asian stocks are solidly bid at press time, having hit four-month highs earlier today.
Fed counseled patience on rates hikes, expressed willingness to adjust quantitative tightening program if required.

Omkar Godbole FXStreet Contributor

Asia stocks jumped to four-month highs soon before press time, tracking Wall Street, after the Federal Reserve it would be "patient" in raising rates going forward.

MSCI's index of Asia-Pacific shares outside Japan rose to its highest since Oct. 4 and is currently up 0.35 percent on the day.

The Shanghai Composite index is reporting a 0.46 percent gain, while shares in Japan and Australia have added 0.8 percent and 0.20 percent, respectively. Meanwhile, South Korea's Kospi is currently down 0.10 percent.

On Wednesday, the Fed kept interest rates unchanged as expected and said that the next move in rates could be up or down - a significant change from the previous language of further gradual rate hikes.

Further, it expressed readiness to adjust any of the details for completing balance sheet normalization if in light of economic and financial conditions.

As a result, US stocks picked up a strong bid, with Dow Jones Industrial Average surging more than 400 points. Meanwhile, the 10-year tresury yield fell almost four basis points to 2.67 percent.

The risk-on action, however, could be short-lived, if the US and China fail to reach a deal soon.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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