Asia-Pacific markets open higher after Fed keeps interest rate steady

Asia-Pacific markets opened higher, tracking Wall Street gains following the Federal Reserve’s decision to hold interest rates steady. The U.S. central bank also noted that a severe economic downturn was unlikely.

Australia’s S&P/ASX 200 traded 0.77% higher at the open.

South Korea’s Kospi climbed 0.64% at the open, while the small-cap Kosdaq rose 0.55%.

Hong Kong’s Hang Seng index futures were at 24,719, weaker than the HSI’s last close of 24,771.14.

Japan markets are closed for a holiday.

China kept its key lending rates unchanged on Thursday, as Beijing juggles propping up growth and stabilizing its currency amid mounting trade frictions.

The People’s Bank of China kept the 1-year loan prime rate at 3.1% and the 5-year LPR at 3.6%, where they have been since a quarter-percentage-point cut in October.

The Federal Reserve held interest rates steady at 4.25% to 4.5% on Wednesday, while signaling that they anticipate two rate reductions later in the year. Their economic projection also foresaw rising inflation and reduced economic growth.

Fed Chair Jerome Powell also noted that while economists sounded the likelihood of a recession, a severe downturn is not likely. The Fed’s decision comes against a backdrop of festering tensions between the U.S. and its key trade partners.

U.S. stock futures were little changed after the three major averages rallied after the Fed maintained its outlook for two interest rate cuts this year.

Overnight in the U.S., the three major averages closed higher. The S&P 500 clawed back more of the rout since late February that took the benchmark briefly into correction territory. The Dow Jones Industrial Average climbed 383.32 points, or 0.92%, and closed at 41,964.63. The S&P 500 jumped 1.08% to end at 5,675.29, and the Nasdaq Composite advanced 1.41% to settle at 17,750.79.

— CNBC’s Sean Conlon and Pia Singh contributed to this report.