GLOBAL MARKETS-Asian shares set for mostly weaker open after Fed

By John McCrank
NEW YORK, Sept 16 (Reuters) - Asian shares were set to drift
lower on Thursday as concerns about the strength of the
recovery from the COVID-19 pandemic remained, even after the
U.S. Federal Reserve pledged to hold interest rates near zero
until at least 2023.
Australian S&P/ASX 200 futures YAPcm1 lost 0.22% in early
trading. Japan's Nikkei 225 futures NKc1 were flat, while Hong
Kong's Hang Seng index futures .HSI HSIc1 lost 0.15%.
E-mini futures for the S&P 500 EScv1 rose 0.47%.
The Fed said it would keep interest rates near zero until
inflation is on track to "moderately exceed" the central bank's
2% inflation target "for some time," with the aim of offsetting
years of weak inflation and allowing the economy to add jobs for
as long as possible. The median forecast of Fed policy makers is for rates to
stay near zero through 2023.
"Of course, sensible people wouldn't really hold anyone to
macro forecasts that far out so we'll cross that bridge when we
get to it," said Derek Holt, head of capital markets economics
at Scotiabank. "Nevertheless, markets are priced for basically
one outcome here and that is little inflation and no hikes for
years to come."
U.S. shares rose with the Fed's statement, which came after
a two-day policy meeting, but then reversed gains as Fed
Chairman Jerome Powell spoke afterward.
The economic recovery is ongoing but the pace is expected to
slow, requiring continued support from the Fed and from further
government spending, Powell said.
U.S. lawmakers have been at an impasse for months over a new
stimulus package.
"We see a risk that economic activity slows in the absence
of more fiscal stimulus," Joseph Capurso, head of international
economics at Commonwealth Bank of Australia, said in a note.
U.S. data showed that at least one key driver of the U.S.
economy was already slowing, with retail sales pulling back in
August as extended unemployment benefits were cut for millions
of Americans. The S&P 500 .SPX fell 0.46% and the Nasdaq Composite
.IXIC dropped 1.25%, with technology shares leading the
decline.
MSCI's benchmark for global equity markets .MIWD00000PUS
fell 0.17% to 574.65.
Longer-term U.S. Treasury yields and gold prices edged
higher after the Fed. The Bank of Japan is set to keep monetary policy steady on
Thursday and stress its readiness to work closely with the new
government led by Yoshihide Suga, who has vowed to do whatever
it takes to ease the economic blow from the coronavirus.
Investors will focus on what BOJ Governor Haruhiko Kuroda
says at his post-meeting briefing on how the central bank will
work with the new government to underpin the economy with its
dwindling policy tool-kit.
The Japanese yen JPY= rose overnight and extended gains
that hit a nearly seven-week high of 104.995 to the dollar as
investors sought safer assets, before slipping back to 104.97
per dollar.
The Australian dollar fell 0.05% versus the greenback to
$0.730.