 "Asian shares tripped up by surprisingly bullish Fed")
Asian shares retreated on Thursday after the Federal Reserve unexpectedly lifted its view on the economy, signalling that the US central bank remains firmly on track with plans to raise interest rates this year.
The Fed said falling energy prices boosted household purchasing power, even as it acknowledged a decline in certain inflation measures and added international developments would be taken into consideration.
"The markets were a bit surprised that the Fed was more hawkish than expected, especially considering that many people had thought that the board members this year would be more dovish than last year's," said Hideyuki Ishiguro, senior strategist at Okasan Securities.
Four voting members from regional Feds at the policy committee this year are considered less hawkish than last year's rotating members.
A greater likelihood of higher US interest rates this year helped Asian stock indexes follow Wall Street into negative territory. Japan's Nikkei slipped 0.7% and MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.4%.
The Dow Jones industrial average fell 1.1% to a six-week low while the S&P 500 lost 1.4%.
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The Fed's optimism and unwavering stance on future rate hikes contrasted with a recent spate of dovish policy shifts at many central banks around the world - from Europe to Canada to India.
That helped the US dollar recoup some losses this week, with the dollar index against a basket of major currencies gaining 0.6% to 94.627.
The euro slipped to $1.1284 from a high of $1.1423 hit on Tuesday, with signs of tension in Greek financial markets adding to downward pressure.
Greek short-term bond yields hit their highest since the country's 2012 debt restructuring and Greek shares tumbled 9% to a 2 1/2-year low on Wednesday as the new government in Athens appeared to be squaring up for a fight with international creditors.
The New Zealand dollar tumbled to a 3-1/2-year low on Thursday after the Reserve Bank of New Zealand dropped its tightening bias on official interest rates, instead signalling that the next move could be either up or down.
Against the yen, the dollar was little changed at 117.51 yen as weakness in share prices helped to support the safe-haven Japanese currency.
As share prices eased, US bond yields have fallen, with the 30-year yield hitting a record low of 2.273% on Wednesday.
The 10-year yield stood at 1.726%, near this month's low of 1.698%, which was its lowest level since May 2013.
But US interest rate futures hardly budged.
The Fed repeated it will be "patient in beginning to normalize" rates, although it dropped a reference that rates will be held at the current levels "for a considerable time" -- which many traders had taken to mean about six months.
Despite the indication from the Fed that the first rate hike could come as early as in June, markets have relentlessly pushed the timing out to year-end and are plotting a much lower trajectory for future hikes.
Oil prices slumped anew, with US crude futures hitting a near six-year lows after government data showed record-high inventories in the United States.
US crude futures stood at $44.50, having sunk to as low as $44.08 on Wednesday, their lowest since April 2009.