Asia markets look to rally, comforted by strong Wall Street, confident Fed

Share prices on display in Tokyo on Dec 16, 2014. Asian shares looked to rally on opening on Thursday after US stocks enjoyed their strongest session this year. -- PHOTO: AFP
Share prices on display in Tokyo on Dec 16, 2014. Asian shares looked to rally on opening on Thursday after US stocks enjoyed their strongest session this year. -- PHOTO: AFP

SYDNEY (Reuters) - Asian shares looked to rally on opening on Thursday after U.S. stocks enjoyed their strongest session this year when the Federal Reserve sounded upbeat on the economy and promised to be patient in removing policy stimulus.

The jitters of recent days also calmed a touch as Russia managed to stabilise its rouble, if only for now, and oil prices eked out a rare bounce. As risk aversion ebbed, U.S. bond yields rose and the US dollar regained some lost ground.

In Asia, Nikkei futures were pointing to an opening increase of at least 1 per cent, while stocks in Australia climbed 1.1 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan was flat.

Wall Street rebounded after three days of declines after the Fed said it would adopt a "patient" approach to raising interest rates.

Equity investors seemed content that any move would be cautious and drove the Dow up 1.69 per cent. The S&P 500 gained 2.04 per cent and the Nasdaq 2.12 per cent.

Bond investors were less enthused as some had thought the downward spiral in oil combined with low inflation, economic weakness globally and the Russian financial crisis would lead the Fed to push out the likely timing of the first hike.

Instead, Fed Chair Janet Yellen played down the impact of oil and falling inflation expectations, while policy members kept their outlook for rates unchanged.

As a result, investors continue to wager that any tightening will proceed at a snail's pace. Fed fund futures currently imply a rate of 0.56 per cent by the end of 2015, while the median forecast by Fed members is 1.25 per cent.

In commodity markets, oil prices were mixed after some wild swings on Wednesday. Brent was up 63 cents at US$60.64, but had been as high as US$68.71 at one stage.

U.S. crude was quoted 36 cents lower at US$56.11 having been as high as US$58.98 on Wednesday.

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