Asian equities rally on Fed news; Nikkei soars 1.72%

Investing.com – Asian stocks were generally higher in Thursday’s session, helped by gains in Japanese exporters and news that the Federal Reserve will engage in further bond-buying activities in 2013.

In Asian trading Thursday, Japan’s Nikkei 225 surged 1.72%. Japanese exporters lead the way as the yen continued to falter against its major rivals. USD/JPY spiked 0.38% to 83.59 while AUD/JPY and NZD/JPY were spotted at multi-month highs. A weaker yen helps boost profits for Japanese exporters.

Hong Kong’s Hang Seng was flat while the Shanghai Composite slid 0.68%. South Korea’s Kospi added 0.67%.

The Federal Reserve did not reduce interest rates, but central bank pledged to consider rate increases until the U.S. jobless rate drops below 6.5%. It currently stands at 7.7%. The central bank concluded its final monetary policy meeting of 2012 before U.S. markets closed Wednesday. This is the first time the Fed has attached its interest rate outlook to the U.S. jobs market.

However, the Fed did say it purchase $45 billion per month in U.S. government debt when Operation Twist concludes at the end of this month.

Elsewhere, Singapore’s Straits Times Index added 0.4% while Australia’s S&P/ASX 200 Index was seen fractionally higher.

Gains may have been capped by speculation that it is becoming less likely U.S. policymakers will have a plan in place before Christmas to avert the fiscal cliff. Talks appear to be progressing, but with Christmas less than two weeks away, a solution appears unlikely. Lawmakers have until the end of the year before Bush-era tax cuts expire, effectively becoming growth-hampering tax increases.

Stocks in Taiwan surged, but the NZSE 50 slid 0.51% on news of the rising New Zealand dollar. In Asian trading Thursday, NZD/USD climbed 0.08% 0.8443, backing off the high off 0.8444 set earlier in the session, but still good enough for the pair’s highest levels since February. The pair was likely to find support at 0.8335, Tuesday's low and resistance at 0.8472, the high of February 29.

AUD/NZD was lower by 0.13% at 1.2497 while EUR/NZD gave up 0.06% to 1.5495.