Dollar shines

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TOKYO: The U.S. dollar shone while Asian shares slipped on Thursday after the U.S. Federal Reserve announced a plan to start shrinking its balance sheet and signalled one more rate hike later this year.

European shares are expected to benefit from a fall in the euro against the dollar with spread betters looking at a higher opening of 0.5 percent in Germany´s DAX and France´s CAC. Japan´s Nikkei gained 0.2 percent as a rise in U.S. bond yields lifted financial shares, while the yen´s fall against the dollar after the Fed´s decision helped exporters.

The Bank of Japan, as widely expected, left its policy settings unchanged, with markets awaiting a news conference by its governor later in the day. MSCI´s broadest dollar-denominated index of Asia-Pacific shares outside Japan fell 0.5 percent, with Australian shares among the hardest hit with fall of 0.8 percent. Major U.S. share indexes recovered quickly from initial losses following the Fed´s announcement, with the S&P 500 ending slightly higher, helped in part by gains in financials and energy shares"While a rate hike is negative, the fact that the Fed´s confidence in the economy is strong enough to expect a rate hike can be taken as supportive of market sentiment," said Soichiro Monji, chief strategist at Daiwa SB Investments.