Amidst some relief at the Federal Reserve's massive interest rate decrease, most Asian equities saw gains in turbulent trade on Thursday. Meanwhile, Japanese markets saw a spike as the yen dropped ahead of a meeting of the Bank of Japan.

After a poor Wall Street overnight finish, gains in regional markets were tempered a little bit as the Federal Reserve raised its forecast for neutral rates, dampening investors' excitement over a massive 50 basis point rate decrease. Concerns about the economy's sluggish growth were also highlighted by the disproportionate reduction.

The Nikkei 225 and TOPIX indices in Japan rose 2.8% to 2% overnight, significantly outperforming their regional counterparts.

Local market gains were accompanied by a softening yen, which following the Fed meeting fell precipitously from over nine-month highs. A spike in the dollar put pressure on the yen.

Prior to the completion of the BOJ meeting on Friday, when experts were unsure about another interest rate rise, Japan's stock market gain also showed some positioning.

However, in the weeks preceding Friday's meeting, a number of BOJ officials had sent out hawkish signals, saying that the central bank would hike interest rates as inflation increased.

Friday's consumer inflation data from Japan is expected to provide fresh hints.

Another good labour market data put pressure on Australia's ASX 200, which increased by 0.3% and gave the Reserve Bank of Australia greater leeway to maintain high interest rates for an extended period of time.

The Shanghai Composite and CSI 300 indices in China increased 0.4% and 0.5%, respectively, continuing a modest recovery from seven-month lows. The Hang Seng index in Hong Kong rose by 0.6%.

The People's Bank of China will determine its benchmark lending prime rate on Friday; but, given Beijing's cautious attitude to further stimulus, economists do not anticipate any adjustments.

Powell of the Fed assuaged some worries about a contracting economy by declaring that the chances of rising inflation and a contracting labour market were now equal.

However, the head chair stated that neutral rates will be significantly higher than they were previously and that the central bank did not want to go back to the extremely low rates that were in place during the COVID-19 epidemic.

In his remarks, he provided a more optimistic forecast for rates in the medium-to-long term and cast doubt on the precise amount that rates will drop during this easing cycle.

(Sources: investing.com, reuters.com)