Analysts note that the Federal Reserve's less hawkish-than-expected stance at its latest meeting will provide relief across Asian asset classes.

Strategists indicate that a weaker US dollar will bolster regional currencies, with short-term bonds and high-grade credit benefiting from the Fed's liquidity injection. Cyclical stocks and exporter shares are also expected to gain.

Here are key market observations:

**Nick Twidale, Chief Analyst at AT Global Markets (Sydney)** Asian markets are poised for a strong opening following the Fed's anticipated rate cut and the US equity rebound. However, I remain cautious about the sustained momentum, as forward guidance may not be as dovish as investors hoped. Jerome Powell's remarks could trigger volatility in coming sessions.

The Fed's decision appears balanced—somewhat hawkish with only one projected 2026 rate cut versus market expectations of two. Yet, the open-ended policy stance may fuel market turbulence.

**Yuya Yokota, FX Trader at MUFG Trust Bank (New York)** The FOMC's less cautious approach to future cuts and unexpected short-term Treasury purchases triggered dollar selling. Focus now shifts to whether USD/JPY finds support below 156, though upside appears capped near mid-157 levels.

**Brendan McKenna, Wells Fargo Emerging Markets Economist & FX Strategist** Asian EM currencies should catch up with the broader EM rally seen in New York. The absence of a feared hawkish cut, coupled with expanded Treasury purchases, will likely pressure the dollar lower.

High-beta currencies like the Korean won and Indonesian rupiah may outperform. The won's undervaluation offers room for gains, while similar dynamics support the rupiah.

Asia could see both relief and sustained rallies—avoiding a hawkish cut scenario provides immediate relief, but Powell's openness to 2026 cuts may drive longer-term dollar weakness and EM FX rebounds.

**Hebe Chen, Analyst at Vantage Markets (Melbourne)** The Fed delivered a "Goldilocks" outcome—a semi-hawkish cut that eases financial conditions while shifting focus from mere rate cuts to broader recovery. This balance should bolster Asian risk appetite, with softer yields supporting equities and currencies while giving regional central banks breathing room.

However, the message remains clear: This is controlled normalization, not an all-clear signal. Asian assets will stay sensitive to data challenging the Fed's "transitory inflation" narrative.

**Yujiro Goto, Nomura Chief FX Strategist** With only two officials dissenting in favor of unchanged rates and short-term Treasury purchases preventing a hawkish pivot, USD/JPY may face resistance ahead of next week's BOJ meeting.