TOKYO, Dec 16 (Reuters) - Asian stocks followed Wall Street higher on Thursday after the U.S. Federal Reserve said it would end bond-buying stimulus in March to set up three interest rate increases next year to tackle heated inflation.
Bond yields rose while the dollar stabilized after slumping overnight as havens fell out of favour. Gold gained along with crude oil.
"The economy no longer needs increasing amounts of policy support," Fed Chair Jerome Powell said in a news conference after the conclusion of the two-day policy meeting.
Japan's Nikkei (.N225) climbed 1.67% and touched a three-week intraday high, while Taiwan's benchmark (.TWII) gained 0.62%.
Mainland China shares slipped though, with an index of blue chips (.CSI300) losing 0.12%.
MSCI's broadest index of Asia-Pacific shares (.MIAP00000PUS) added 0.26%.
U.S. e-mini futures pointed to a 0.12% rise for the S&P 500 (.SPX), after it rallied 1.63% overnight to finish near a record high.
The
Federal Open Market Committee (FOMC) laid out a scenario in which the
COVID-19 pandemic, despite the emergence of the Omicron variant, gives
way to a benign set of economic conditions, with inflation easing
largely on its own, interest rates increasing comparatively slowly, and
the unemployment rate staying low in coming years.
"The FOMC delivered a hawkish tilt for Christmas (but) markets seemingly have taken the tilt in their stride given three hikes were close to being priced into the meeting," Tapas Strickland, a director of economics at National Australia Bank, wrote in a note to clients.
"Powell didn't think the Fed was behind the curve" in fighting inflation, Strickland added. "Risk sentiment remains positive."
Money markets see good odds for a first Fed hike by May, followed by more by September and December, although three quarter-point rate increases aren't fully priced until February 2023.
Ten-year U.S. Treasury yields edged up to 1.4718%, adding to Wednesday's advance...
Source: Reuters
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