Tokyo, japan (BBN)-Asian stock markets are tracking the gains made on Wall Street after the US central bank took a more cautious approach to its monetary policy strategy at its latest meeting.
The Federal Reserve is scaling back the number of interest rate increases it plans to make this year because of concerns over the global economy, reports BBC.
Japan’s benchmark Nikkei and the broader Topix both rose about 1.2 per cent.
Korea’s Kospi gained 1 per cent while Australia’s S&P/ASX 200 was up 1.3 per cent.
Following the Fed’s two-day meeting, the US dollar weakened, spurring gains in emerging Asian currencies like the South Korean won and Malaysian ringgit.
“A risk in recent times has been that a too-aggressive Fed will threaten the global outlook by further pushing up the US dollar which in turn would threaten US growth, put more downwards pressure on oil prices and hence energy producers and add to the risk of a funding crisis in the emerging world,” Shane Oliver, chief economist at AMP Capital in Sydney said.
“By continuing to indicate that it is conscious of global risks and that US rate hikes will be data dependent and gradual, the Fed is clearly indicating that it is not going to do anything to consciously threaten the global and US outlook.”