TOKYO : Asian stocks sagged on Thursday, tracking declines on Wall Street, after the U.S. Federal Reserve projected higher interest rates for a longer period.
Japan's Nikkei eased 0.17 per cent, while South Korea's Kospi dropped 0.92 per cent and Australia's stock benchmark fell 0.4 per cent.MSCI's broadest index of Asia-Pacific shares slumped 0.91 per cent, after climbing as high as 160.37 in the previous session for the first time since late August. The comments followed the Fed's decision to raise the benchmark rate by an as-expected half a percentage point - down from recent 75 basis point increases - but projected a terminal rate above 5 per cent, a level not seen since a steep economic downturn in 2007.
"The weakening in risk assets and the flattening of the curve suggest that recession fears may be the dominant driver of market price action." The dollar index - which measures the greenback against six top peers, including the euro and sterling - held close to the overnight low of 103.44, a level not seen since June 16. It last stood 0.09 per cent stronger at 103.75.
Investors' eyes will now be trained on policy decisions from the European Central Bank and Bank of England later in the global day, as officials there also stood ready to hike rates again against the rising risks of fomenting recessions.