Asian markets rally after Fed rate hike

Asia-Pacific stock markets rallied for the second day in a row on Thursday following the news that the US Federal Reserve had finally increased interest rates for the first time since 2008. The move by the Fed also saw the worth of the dollar make advances against most other currencies.

After a surge in New York, Europe, and Latin America, the news brought rallies across Asian markets as well, with Toyko gaining 2.29 percent by the break, Hong Kong climbing 1.3 percent and Shanghai 1.6, while Sydney clocked a 1.8 percent rise.

Federal Reserve chairwoman Janet Yellen said the call to raise interest rates "recognizes the considerable progress that has been made towards restoring jobs, raising incomes, and easing the economic hardship of millions of Americans," since rates were cut to almost zero in the wake of the global financial crisis.

Ex-Fed chairman Ben Bernanke slashed interest rates in the world's biggest economy in 2008 as part of an effort to reign in the chaos caused by the crisis, which sent global stocks into freefall and saw massive job losses across the country.

The US central bank now expects growth to reach 2.4 percent next year, in spite of a slowdown in most other world economies, especially China.

Currency markets showed on Thursday morning that the move had pushed the US dollar higher above the yen, euro, and Singapore dollar.

Yellen said the decision shows how the US has reaffirmed its place as a "source of strength to the emerging markets and other economies around the globe."

es/bw (AFP, Reuters)