Asian shares were broadly higher on Thursday morning after the U.S. Federal Reserve took a cautious approach to future interest rate hikes and the plan to reduce its $4.5 trillion of bond holdings. South Korean shares lead the rally with a 1.0 percent gain, while Hong Kong’s Hang Seng index gained 0.8 percent. Japan’s Nikkei 225 rose 0.4 percent and MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.7 percent on Thursday morning. Chinese shares were up 0.3 percent on Thursday morning after falling briefly when Moody’s rating agency downgraded the country’s credit from A1 to Aa3 on Wednesday.  

Fed policymakers agreed to hold off on an interest rate hike until it is clear that the U.S. economic slowdown is temporary and not part of a wider phenomenon. Though there is still a chance of a rate hike in June as originally expected, analysts believe that the hike would be hinged on confirmation that the sharp economic slowdown in Q1 2017 has begun reversing, which Fed members have made clear they do expect to happen.

The dollar gained slightly against the yen on Thursday morning, trading at 111.63 as of 6:22 a.m. GMT.The greenback was also up marginally against the British pound, trading at $1.2981.

Oil Prices Rise on OPEC Optimism

Oil prices ticked upwards on Thursday after Iran and Iraq confirmed support of continued production cuts through the first quarter of 2018.Support and compliance by Iran and Iraq are critical because they are the second and third-biggest producers in OPEC and they have tried to prevent production cuts in the past.  

U.S. WTI crude futures were trading at $51.74 per barrel, up 0.74 percent, while Brent crude was up 0.80 percent to $54.39 per barrel.