Asian shares soared to record highs on Thursday, mirroring the S&P 500’s performance, following the US Federal Reserve’s announcement of its intention to reduce interest rates, Reuters reported.
This decision led to a slight depreciation of the US dollar and heightened expectations of a US rate cut in June.
The Fed’s decision to maintain US rates between 5.25 per cent and 5.5 per cent and increase inflation forecasts left the market’s anticipation of three 25 basis point rate cuts this year unchanged.
Despite higher recent inflation outcomes, the Fed’s commitment to three cuts indicates a readiness to ease monetary policy.
Japan’s Nikkei rose 1.5% to a fresh record over 40,000 in early trade. MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 1.6%. Spot gold, an expected beneficiary of lower interest rates as yields on bonds come down, spiked to a record $2,222 an ounce.
