Mumbai, 21 Mar (Commoditiescontrol): Asian shares bounced while gold prices and Japan's Nikkei jumped to record highs on Thursday after the U.S. Federal Reserve indicated it would stick with plans for cutting interest rates.
The U.S. dollar nudged lower and traders slightly increased their expectations for a U.S. rate cut in June.
Japan's Nikkei went up 1.5% to a fresh peak 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.
Overnight the Fed left U.S. rates on hold between 5.25% and 5.5%, as expected, and nudged up inflation forecasts. Policymakers' median projection for three 25 basis point rate cuts this year was unchanged from December.
U.S. Treasury yields fell slightly in New York trade and were steady in Asia. Two-year yields were last at 4.59% and 10-year yields at 4.26%. The S&P 500 notched a record closing high overnight and U.S. and European futures rose in Asia trade.
Fed Chair Jerome Powell told reporters sticky inflation reports show price pressures but "haven't really changed the overall story, which is that of inflation moving down gradually".
In foreign exchange markets the dollar, which had gained in recent days against the risk of a more hawkish turn from the Fed, was sold against most major peers, lifting the yen from near multi-decade lows to 150.45 per dollar.
The euro traded at a week high of $1.0939 in Asia. The Australian dollar also jumped to a one-week high after a startlingly strong jobs report quashed talk of early policy easing.
Gold was last a bit lower than its early-hours spike, though at $2,200 an ounce is up 7% this year.
Brent crude futures were steady at $86.34 a barrel.
(By Commoditiescontrol Bureau: 09820130172)
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