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Equity markets rallied Thursday and the dollar extended losses after the US Federal Reserve indicated it would begin cutting interest rates next year.
The surge across the region tracked a record-breaking day on Wall Street, where traders cheered a much-sought-after dovish pivot from the central bank as US inflation comes down.
After more than a year of hiking, decision-makers at their last meeting of the year acknowledged that they were winning their battle against rising prices and discussed when to change tack to a looser monetary policy.
The Fed held rates at a 22-year high, as expected, and said the decision lets policymakers determine "the extent of any additional policy firming that may be appropriate".
The addition of "any", which was absent in November's decision, was "an acknowledgement that we believe that we are likely at or near the peak rate for this cycle", Fed chief Jerome Powell told reporters.
Officials also released their "dot plot" of future rates, which saw 75 basis points of cuts in 2024 -- more than indicated in September.
Traders are betting on 140 basis points of cuts over the next year, Bloomberg News said.
Powell said that while the forecasts were not set in stone, policymakers had spoken about when to begin slackening the reins.
"That begins to come into view and is clearly a topic of discussion out in the world and also a discussion for us at our meeting today," he said.
Kellie Wood of Schroders said: "The Fed has delivered an early Christmas present to markets.
"The next move is a cut and markets are now anticipating a faster and sharper easing cycle."
The news sparked a bullish surge on Wall Street, with the Dow ending at a record high of over 37,000, while the S&P 500 closed at a near two-year high.
Treasuries -- seen as a guide to future rates -- strengthened, with 10-year yields at a four-month low below four percent.
The upbeat mood carried through to Asia, where Hong Kong, Sydney, Seoul, Singapore, Taipei, Manila, Bangkok, Mumbai and Jakarta all climbed.
London and Paris rallied at the open, with Frankfurt opening at a record high.
But Shanghai dipped on lingering worries about the struggling Chinese economy.
Gold held above $2,000 following a bounce in reaction to Wednesday's Fed news.
Tokyo also dropped, partly on a stronger yen, which jumped about 1.8 percent against the dollar Wednesday.
The Japanese unit improved to 140.97 per dollar at one point, its highest in more than four months, before easing slightly.
The Bank of Japan meeting next week is firmly in focus for forex investors, though recent speculation that it will move away from its ultra-loose policy has faded in recent days.
Japanese traders were also keeping tabs on a political crisis engulfing Prime Minister Fumio Kishida after three ministers resigned over a major corruption scandal in the ruling party.
The greenback retreated across the board, with the euro and pound enjoying fresh strength.
US futures were again in positive territory.
While investors are in a buying mood, Paul McSheaffrey at KPMG China warned, "I don't think this should be taken as a sign that rates will fall in the short term.
"The Fed will want to ensure they really have got inflation under control before reducing rates."
Oil prices extended a rally that came after data showed US stockpiles fell from the previous week.
They are, however, still sitting around six-month lows owing to concerns about rising output and slackening demand, particularly from China.
- Key figures around 0810 GMT -
Tokyo - Nikkei 225: DOWN 0.7 percent at 32,686.25 (close)
Hong Kong - Hang Seng Index: UP 1.1 percent at 16,402.19 (close)
Shanghai - Composite: DOWN 0.3 percent at 2,958.99 (close)
London - FTSE 100: UP 1.7 percent at 7,677.61
Dollar/yen: DOWN at 142.00 yen from 142.89 yen on Wednesday
Euro/dollar: UP at $1.0890 from $1.0878
Pound/dollar: UP at $1.2632 from $1.2617
Euro/pound: UP at 86.23 pence from 86.18 pence
West Texas Intermediate: UP 0.6 percent at $69.86 per barrel
Brent North Sea crude: UP 0.7 percent at $74.78 per barrel
New York - Dow: UP 1.4 percent at 37,090.24 (close)
J.P.Cortez--TFWP