Asian stocks rose early Thursday after the U.S. Federal Reserve raised interest rates for the first time in nine years, signaling confidence that the economy is recovering sustainably from the global financial crisis, though also implying that further increases will be gradual.
Japan's Nikkei 225 rose 2.2 percent, Korea's KOSPI and Singapore's STI 0.9 percent and Australia's ASX 200 1.8 percent.
In the U.S. on Wednesday, the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite all rose from 1.3 percent to 1.5 percent.
The Federal Reserve raised the range of its benchmark interest rate to 0.25 percent to 0.5 percent, from the zero to 0.25 percent range it's been at since the global financial crisis. Chairwoman Janet Yellen said further hikes would be gradual, signaling four quarter-point increases in 2016. Markets have been expecting both today's increase and gradual further increases after Yellen and other bank officials pointed to them on many occasions in recent weeks. Analysts said that accounts for the moderate gain in share prices.
"The Fed will be absolutely delighted with the lack of volatility across all asset classes," said Alan Ruskin, the global head of Forex (FX) at Deutsche, as reported by Reuters. "Nothing here to change a view that we can have a moderate 'risk-positive, minor rally', even if the probability of a March hike is significantly higher than priced."
In a press conference on Wednesday where Yellen discussed the decision at the end of the bank's two-day meeting, she said “Americans should realize that the Fed’s decision today reflects our confidence in the U.S. economy."
“It’s the Fed giving its seal of approval on the economy and financial conditions, but also the Fed didn’t surprise with a more aggressive future path,’’ said Stephen Wood, who helps manage $237 billion as a chief market strategist for North America at Russell Investments in New York, according to Bloomberg. “This is a very dovish rate increase. It came right in in line with expectations.”