TOKYO -- Share benchmarks in Asia are seeing moderate losses early Thursday, after the Federal Reserve raised interest rates overnight. The quarter percentage point rate increase, the second in a decade, was widely expected although investors were surprised to see the Fed project three more increases for 2017.
KEEPING SCORE: Japan's Nikkei 225 index was the only market to climb early Thursday, gaining 0.2 percent to 19,294.70 after the release of upbeat manufacturing data. Hong Kong's Hang Seng fell 1.1 percent to 22.214.45 and Australia's S&P ASX 200 dropped 0.8 percent to 5,540.70. South Korea's Kospi lost 0.4 percent to 2,028.95 and the Shanghai Composite index fell 0.3 percent to 3,129.95.
FED'S MOVE: The hike took the Fed's key short-term rate to a range of 0.50 percent to 0.75 percent. Investors reacted to the Fed's announcement Wednesday by selling stocks that would be most hurt by higher interest rates, which raise the cost of borrowing and can slow corporate profits and economic growth. The Fed also raised its forecast for rate hikes in 2017 to three from two.
WALL STREET BLUES: Stocks had their worst day in two months after the Fed's announcement, and four stocks fell for every one that rose on the New York Stock Exchange. The Standard & Poor's 500 index fell 18.44 points, or 0.8 percent, to 2,253.28, its biggest percentage loss since mid-October. The Dow Jones industrial average fell 118.68 points, or 0.6 percent, to 19,792.53. The Nasdaq composite fell 27.16, or 0.5 percent, to 5,436.67.
CURRENCIES: The rate hike caused the dollar's value to surge by more than 1 percent against other currencies, but by mid-morning Thursday in Asia, the dollar had fallen back to 117.60 yen from its previous session close of 117.74 yen. The euro was at $1.0505, up from $1.0471.
ANALYST VIEWPOINT: "We will have to watch the price action over the next few days, to see if this was a knee jerk reaction, or the start of another leg of concerted U.S. dollar strength," Jeffrey Halley, senior market analyst at OANDA, said in a commentary.
CURRENCIES: Benchmark U.S. crude fell 18 cents to $50.86 a barrel in electronic trading on the New York Mercantile Exchange. It dropped $1.94 a barrel on Wednesday. Brent crude, the international standard, lost 6 cents to $53.84 a barrel in London.
BOND YIELDS: The yield on the 10-year Treasury note touched its highest level in more than two years and sat at 2.57 percent late Wednesday, up sharply from 2.47 percent a day earlier. Bond yields have been in an upward trend for the last month, and the yield on the two-year Treasury reached its highest level since the summer of 2009. It was trading at 1.27 percent late Wednesday, up from 1.17 percent.