Asian markets follow Wall St higher on Fed rates promise

BEIJING (AP) — Asian stock markets followed Wall Street higher on Thursday after the U.S. Federal Reserve said its key interest rate would be kept near zero through 2023.

Benchmarks in Shanghai, Tokyo and Hong Kong advanced. Sydney retreated.

The Fed's promise to keep rates near rock bottom came even as it forecast this year's economic growth will rebound to 6.5% — its strongest since the 1980s — and inflation will climb above 2% for the first time in years.

On Wall Street, the benchmark S&P 500 index rose 0.3% to a new high.

Fed Chairman Jerome Powell's comments at a news conference appeared to reassure investors who worry higher inflation might prompt central banks to raise rates, which would weigh on economic growth.

“The market reaction suggests investors are satisfied with the Fed’s explanations for now,” said Tai Hui of JP Morgan Asset Management in a report. “Inflation is expected to rise in the coming months, and the Fed may need to provide more handholding to the market during this price spike.”

The Shanghai Composite Index rose 0.6% to 3,465.85 and the Nikkei 225 in Tokyo advanced 0.9% to 30,192.11. The Hang Seng in Hong Kong added 1.5% to 29,474.61.

The Kospi in Seoul advanced 0.7% to 3,068.01 while Sydney's S&P-ASX 200 was off 0.7% at 6,745.90.

India's Sensex rose 0.5% to 50,043.87. New Zealand also declined while Southeast Asian markets advanced.

Investors have been uneasy that inflation might accelerate after governments flooded sagging economies with extra spending and credit to reverse the deepest global slump since the 1930s.

Central banks traditionally respond to higher pressure for prices to rise by hiking interest rates. But Fed officials have said they would let the U.S. economy “run hot” to make sure a recovery is...