Asian shares seen falling, dollar soft after Fed holds rates

Thu Sep 17, 2015 7:17pm EDT
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By Hideyuki Sano

TOKYO (Reuters) - Asian shares are likely to fall on Friday after the U.S. Federal Reserve held off on raising interest rates, reviving concerns about global economic weakness.

The dollar was on back foot, having fallen more than 1 percent after the Fed's decision while U.S. bond yields plunged, erasing their sharp rises in the past couple of days.

Nikkei futures traded in Chicago NIYZ5 pointed to a fall of about 0.9 percent in the Nikkei average .N225.

Major Wall Street indexes gave up a 1 percent rally to end lower, with the S&P 500 index .SPX losing 0.3 percent.

Fed Chair Janet Yellen said the outlook abroad has appeared to become less certain, adding that recent falls in U.S. stock prices and a rise in the value of the dollar already were tightening financial market conditions.

Analysts and traders had been nearly evenly split on whether the central bank would raise rates for the first time in nearly a decade.

"I think today's decision will prove positive for markets in the end. But volatility is likely to remain high as markets, like the Fed, will still have to confirm the U.S. economy is withstanding the adverse impact from the global economy," said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management.

The Fed's fresh economic projections showed 13 of 17 policymakers still foresee raising rates at least once in 2015, though that is down from 15 at the last forecast made in June.   Continued...

A pedestrian is reflected on a an electronic board showing the Japan's Nikkei average (top) and other market indices including the exchange rate between the Japanese yen against the U.S. dollar (bottom) at a brokerage in Tokyo, Japan, September 9, 2015. REUTERS/Yuya Shino