Asia's Investors cheer the Fed's move to raise rates

 

The move takes the range of rates banks offer to lend to each other overnight to between 0.25% and 0.5%.

Australia's stock exchange was the first major benchmark index in the region to open to the news - and investors cheered.

Sydney's S&P/ASX 200 was up as much as 1.6% in early trade.

Japan's Nikkei 225 was up 2.15% at 19,460.20 after marking one of its biggest daily gains in more than two months on Wednesday. 

The dollar strengthened against the yen and was buying 122.38 yen in Asian trade. A weaker yen is good for Japan's big exporters.

In South Korea, the Kospi index was up 0.25% at 1,974.1.

The Fed's decision to raise rates was widely expected and analysts said it indicated a degree of optimism for the world's biggest economy.

"The move signals confidence in the ongoing recovery in the US economy after the great financial crisis," said Shane Oliver, head of investment strategy and chief economist at AMP Capital in Sydney.

"Given ongoing deflationary risks and slow global growth, future Fed hikes are likely to be cautious and gradual," he added. 

"With the Fed decision out of the way, global shares are likely to resume their rising trend but with US shares as a relative underperformer."

The Australian dollar initially fell against the US dollar, but recovered later to buy 72.12 US cents. Australia is hoping to see its currency weaken against the dollar in the coming months.

Mr Oliver said rising US interest rates would help maintain downwards pressure on the value of the Australian dollar through 2016.