Asia stocks rose to a four-month high on Thursday, tracking Wall Street, after the Federal Reserve pledged to be patient with further interest rate hikes, signalling a potential end to its tightening cycle amid signs of slowing global growth.
The dollar struggled near a three-week trough against its major peers and U.S. Treasury yields were significantly lower as investors reacted to the Fed's change in tone.
MSCI's broadest index of Asia-Pacific shares outside Japan rose to its highest since Oct. 4 and was last up 0.4 percent.
Japan's Nikkei rose 1.4 percent. Australian stocks added 0.4 percent, while South Korea's KOSPI advanced 0.7 percent.
The Fed on Wednesday held interest rates steady as expected, and also discarded its promises of "further gradual increases" in interest rates.
The central bank said it would be "patient" before making any further moves amid a suddenly cloudy outlook for the U.S. economy due to global growth risks and impasses over trade and government budget negotiations.
On Wall Street, the Dow and the Nasdaq rallied 1.7 percent and 2.2 percent, respectively, on hopes the Fed's pause would give the U.S. economy and corporate profits more room to run.
"The Fed's statements firmly confirmed its dovish stance, which had already been on display at the start of the year. Market concerns towards the Fed's rate hikes have now been put to rest," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
"The mention of the balance sheet by the Fed was a positive surprise. The focus now shifts immediately to U.S.-China trade talks, but the equity markets could have enough cushioning to withstand negative news from the talks."
The U.S. central bank also said on Wednesday that its balance sheet would remain larger than previously expected.
The United States and China opened a pivotal round of high-level two-day talks on Wednesday aimed at bridging deep differences over China's intellectual property and technology transfer practices and easing a months-long tariff war.
If the two sides cannot reach a deal soon, Washington has threatened to more than double tariffs on Chinese goods on March 2.
In currencies, the dollar index against a basket of six major currencies struggled near a three-week low of 95.253 brushed on Wednesday, when it had sunk 0.5 percent.
A weaker dollar helped nudge the euro to $1.1501 on Wednesday, its highest since Jan. 11, and the common currency was last up 0.1 percent at $1.1488.
The greenback was down 0.1 percent at 108.96 yen and close to a two-week low of 108.81 reached overnight.
The pound was a shade higher at $1.3123, given some reprieve after slipping earlier in the week when British lawmakers voted down a proposal in parliament that could have prevented a potentially chaotic "no-deal" Brexit.
The benchmark 10-year U.S. Treasury yield stood at 2.681 percent after sliding to 2.676 percent overnight, its lowest since Jan. 14.
Oil prices rose after U.S. government data showed signs of tightening supply and as investors remained concerned about supply disruptions following U.S. sanctions on Venezuela's oil industry.
U.S. crude oil futures were up 0.46 percent at 54.48 per barrel.