(Reuters) – Technology plays led Asian shares higher on Wednesday after the Federal Reserve maintained its pledge to hold interest rates near zero, which kept the dollar near one-month lows against major currencies.
The MSCI index of Asian shares excluding Japan rose 1 percent, tracking U.S. shares which hit a 17-month high overnight after the Fed reiterated that it would keep policy loose for an extended period of time.
The central bank also pointed to increased momentum in the recovery of the world’s largest economy and sounded more upbeat about the job market. Speculation that Intel will release positive guidance for the current quarter also helped boost shares of chipmakers and other tech companies in Asia.
Shares in South Korea rose 0.9 percent, with Hynix Semiconductor up 1.7 percent.
Taiwan stocks rose 1.2 percent as gains on Wall Street fueled buying in technology exporters such as AU Optronics, which are riding on growing demand for new computers and other consumer gadgets. AU jumped 2.5 percent.
“Big tech shares are pushing the market higher because prices of DRAMs and (flat) panels are rising and we also see foreign investors coming back,” said Tom Tang, a vice president at Masterlink Investment Advisory.
Tokyo’s benchmark Nikkei index rose 0.8 percent to an eight-week high as chip shares rose, with Elpida Memory also climbing on a media report of upbeat earnings. But gains were capped by caution ahead of a Bank of Japan policy decision later in the day.
Global stocks were already on a firm note before the Fed’s widely expected announcement, buoyed by Standard & Poor’s move to affirm Greece’s BBB-plus credit rating.
S&P’s decision to end its review for a ratings downgrade removed a potential blow to Greece’s efforts to raise capital in international markets to plug a gaping fiscal shortfall. However, the credit rating agency did say Athens was still at risk of a rating cut in the next 18-24 months if failed to implement a deficit cutting plan.
Meanwhile, the dollar hovered near one-month lows against a basket of currencies as investors cut long positions after the Fed’s rate decision.
The Fed has targeted an overnight bank-to-bank lending rate of between zero and 0.25 percent since December 2008.
Interest rates near zero diminish the yield appeal of the U.S. dollar against higher-yielding currencies. Many economists do not see a U.S. rate rise until late in the year.
The dollar was also under pressure against the yen as the Bank of Japan is expected to further ease its ultra-loose policy to spur the economy and keep yen gains in check.
Gold rose 0.3 percent to $1,127.85 , extending its gains of more than 1 percent the previous day as a U.S. Federal Reserve decision to hold interest rates unchanged burnished the metal’s investment appeal.
U.S. crude futures edged up 13 cents to $81.83 a barrel after settling up $1.90 at $81.70 the previous day, supported by weakness in the dollar and expectations that producer group OPEC will keep oil output cuts in place..
(Reporting by Kevin Yao; Editing by Kim Coghill)