Asian shares pressured as greenback, US Treasury yields rise on Fed

Asian shares pressured as greenback, US Treasury yields rise on Fed

Asian shares pressured as greenback, US Treasury yields rise on Fed

Chair Janet Yellen said the Fed would shed up to $10 billion of debt per month through December.

Year-on-year, New Zealand's economy grew in the last quarter, as expected. It has also trimmed its inflation forecast.

Japan's Nikkei 225 slid 0.05 percent after surging close to 2 percent on Tuesday.

The central bank also expects inflation will remain stubbornly low. They rose over 1.5 per cent as a weaker euro helped the pan-European STOXX 600 generally too. That would mean inflation would fall short of the Fed's 2 percent target for the sixth straight year.

Shares of USA financial stocks rose and government bonds fell Wednesday after the central bank kept the door open for a December interest-rate rise and said it would begin shrinking its portfolio of bonds next month, signalling continued optimism about the economy despite low inflation.

"If I'd be watching anything, it would be primarily with regard to their plans to raise rates in December, which now the market has a 50-50 odds on", said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

Following the recent slowdown in inflation the median projection of future hikes is likely to be somewhat downgraded, which may pressure the greenback lower this evening.

The Fed also said it will begin to unwind its $4.5 trillion balance sheet in October. The Fed's balance sheet reduction could worsen that. Wellington slipped 0.3 percent but Taipei was up 0.6 percent.

US dollar surges after Fed policy statement

Of course, this misses the obvious: The Fed is about to finally start the process of reversing years of QE-based bond-buying stimulus that's been responsible for the smooth and easy nature of the bull market since 2012.

The US Federal Reserve is the first central bank to indicate it believes its economy can withstand a tightening of monetary policy, given the US economy is seeing comfortable signs of recovery.

Greater China markets were mostly flat in early trade.

The Federal Reserve on Wednesday maintained its benchmark interest rate at a range of 1% to 1.25%. American Airlines Group Inc (NASDAQ:AAL) gained 2.3% thanks to an upgrade by Raymond James analysts noting initiatives aimed at corporate and premium consumers is getting traction. The Dow Jones industrials fell 0.2 percent to 22,359.23.

The gold price and interest rates / bond yields usually move in the opposite direction as gold produces no income and investors have to rely on price appreciation to book returns. The move will gradually increase long-term borrowing rates.

Spreadbetters expected Britain's FTSE .FTSE to start unchanged and Germany's DAX .GDAXI and France's CAC .FCHI to each open down about 0.1 percent.

"The Fed will likely stick to its intent of hiking rates one more time in 2017 and three more times in 2018".

On Thursday, yields on 10-year German government bonds rose to 0.475% from 0.435% Wednesday before the Fed decision, while 10-year Treasury yields steadied at 2.277% after climbing to 2.276% Wednesday after the Fed to their highest since early August.

More news: Fed rate hike remains uncertain after Harvey, Irma

Related news