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Hong Kong - Asian markets slipped on Thursday after the US Federal Reserve kept its stimulus programme unchanged, but gave a rosier-than-expected summary of the economy that fuelled rumours it will start winding it down soon.
While the central bank's decision to keep the $85bn a month scheme in place was widely expected, the upbeat outlook provided strong support for the dollar.
Tokyo fell 0.21% by the break on profit-taking after the index rose almost 3% in the past three sessions. Hong Kong eased 0.73% and Seoul lost 0.68% while Shanghai gave up 0.23% and Sydney was flat.
After a closely watched two-day policy meeting, the Fed said on Wednesday it would hold steady on its bond-buying programme as it waits for further signs the economy is strong enough to stand on its own.
Policymakers made no reference to the potential impact of October's government shutdown and did not hint at their plans for the stimulus.
However, analysts noted the bank did not downgrade its outlook from earlier statements, and some suggested it could begin to reel in the scheme as early as the next policy meeting in December.
"While maintaining that the economy continued to expand at a moderate pace and that housing may have slowed slightly, overall the Fed noted that downside risks have diminished," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.
The commentary was "slightly more optimistic than expected" and "not as dovish as many had expected", Esiner added.
Investors have been keeping a close eye on the Fed's plans for the stimulus since May, when it indicated it might begin cutting down bond purchases, sending global markets tumbling.
Tapering had been expected by the end of this year but a weak set of data - including soft jobs growth - and this month's two-week government shutdown had made that highly unlikely.
However, the latest comments have sparked talk of such a move before January.
The dollar advanced in New York in expectation there will be less cash washing around the financial system, although it retreated slightly in early Asian trade.
The greenback bought ¥98.44 on Thursday, compared with ¥98.52 in New York but well up from ¥98.14 earlier on Wednesday in Tokyo.
The euro bought $1.3732 and ¥135.20 yen on Thursday, against $1.3738 and ¥135.35.
And on Wall Street the three main indexes retreated on the news, with the Dow and S&P also hit by profit-taking after hitting record highs in the previous session.
The Dow fell 0.39% and the S&P 500 declined 0.49%, while the Nasdaq lost 0.55%.
In oil trade New York's main contract, West Texas Intermediate for delivery in December, fell 13 cents to $96.64 in morning Asian trade, and Brent North Sea crude for December dropped 29 cents to $109.57.
Gold rose to $1 338.97 at 02:30 GMT compared with $1 350.42 on Wednesday.
