Asian shares fell on Thursday, while the dollar recovered most losses made after the U.S. Federal Reserve vowed to keep rates near zero for an extended period and saw a sluggish recovery in the world's biggest economy.
European shares were set to fall at the start, with futures on the Dow Jones Euro Stoxx 50 down 1.2 percent. U.S. equity futures were 0.4 percent lower.
The euro drew profit taking ahead of a European Central Bank meeting later on Thursday. The ECB is expected to keep interest rates at a record low but may give clues on when it will start weaning banks off cheap funds.
The euro fell to $1.4818, from $1.4865 in early trade.
Sterling also slipped before a Bank of England meeting, with policymakers set to decide whether to inject more stimulus into the British economy.
Asian share markets fell as investors gained little encouragement from the Fed, which vowed to maintain a very loose monetary policy in the absence of inflation pressure, and said U.S. economic recovery, though building, would be muted.
The MSCI index of Asia Pacific stocks traded outside Japan <.MIAPJ0000PUS> fell 1 percent while the Thomson Reuters index of regional shares <.TRXFLDAXPU> was 1.5 percent lower.
All eyes now are on U.S. job data on Friday for more clues on the state of U.S. economic recovery, analysts said.
Investors were pushing the market lower, preparing for more selling by investors such as hedge funds in case U.S. jobs data raises a disturbance, said Tsuyoshi Segawa, an equity strategist at Mizuho Securities in Tokyo.
Japan's Nikkei <.N225> share index slid 1.3 percent to a one-month closing low.
Shares of exporters were hit by early gains in Asian currencies although the dollar recovered ground. It was up 0.2 percent against a basket of currencies at 75.9 by mid-afternoon. Dealers said it remained vulnerable as the Fed statement did not signal a change in monetary policy.
Toyota <7203.T> shares, however, could be poised to rebound on Friday after the world's biggest carmaker by sales sprung a surprise quarterly profit and slashed its annual loss forecast by more than half. Toyota shares fell 0.8 percent, closing before the earnings announcement.
HYUNDAI SHARES SLUMP
In Seoul, shares <.KS11> tumbled 1.8 percent with trade volume hitting a 14-month low. That was despite upbeat economic data, including double-digit department store sales growth and a further rise in exports to China last month.
Hyundai Motor <005380.KS> shares slumped 4.2 percent after analysts said Korea's top car maker, which specializes in small and mid-sized cars, could lose market share in the United States.
Asian currencies were mixed by mid-afternoon. Indonesia's central bank intervened to support the rupiah as investors took profits on a recent rally.
Thailand's central bank governor Tarisa Watanagase, in an interview with Reuters, said she was not worried about appreciation of the Thai baht, which is up 4 percent this year, saying it remained competitive for trade.
Shares in Australia slid 0.7 percent, but toll-road operator Transurban Group
Japanese government bond futures fell, tracking a slide in longer-term U.S. Treasuries on investor fears of excessive government debt supply after the Fed's statement and a weak 10-year bond auction.
Gold, buoyed this week by India's 200-tonne purchase from the IMF, slipped to $1,085 an ounce after hitting another record high overnight, at $1,097.25.
In New Zealand, the kiwi dollar fell after weak job data there and the central bank said economic recovery was more vulnerable than in Australia and the jobless rate hit a nine-year high.
New Zealand has had a recession, and the pick-up is slower and more vulnerable -- a difference financial markets do not appear to appreciate, Reserve Bank of New Zealand Governor Alan Bollard said in notes prepared for a business group.
The kiwi fell to as low as $0.7179, from around $0.7270 before Bollard's comments.
Weak equity markets pushed the oil price down 0.9 percent to $79.7 a barrel, after its more than $3 gain in the past three days.
(Additional reporting by Gyles Beckford in WELLINGTON and Aiko Hayashi in TOKYO; Editing by Kazunori Takada)