The Federal Reserve Chair Jerome Powell came at surprise to the market after he retreated from his earlier view on inflation, calling an end to the phrasing transitory inflation.
Powell also noted during December meeting, the committee would decide if to speed up wrapping of the asset tapering earlier than initially planned in June. This would leave significant room for the FED to raise rates earlier.
A rates hike would mean capital inflow to the U.S., adversely making Asian markets unfavorable.
Additionally, a stronger dollar would lead to export-heavy Asian companies be less competitive.
However, Asian stocks are currencies on Wednesday are railing on the hope that Powell’s comments on faster tapering was already anticipated during his previous term. The market believes Powell eventually would have made these comments at some point in time.