TOKYO (Reuters) - Asian shares edged down on Thursday after the Federal Reserve raised interest rates and took a more hawkish tone in forecasting a slightly faster pace of tightening for the rest of the year, while concerns about U.S.-China trade frictions kept investors on edge.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS lost 0.25 percent in early trade. South Korea's KOSPI .KS11 was off 0.9 percent, while Australia's market slipped 0.2 percent.
Japan's Nikkei .N225 shed 0.7 percent.
The Fed raised its benchmark overnight lending rate a quarter of a percentage point to a range of 1.75 percent to 2 percent, as expected, on the back of strong U.S. economic growth.
The markets, however, latched on to a change in Fed policymakers’ rates projections, which pointed to two additional hikes by the end of this year compared to one previously, based on board members’ median forecast.
The specter of higher borrowing costs hit stocks while boosting U.S. bond yields and the dollar. The overall market reaction was short-lived, however.
“When you look more closely, only eight board members saw two more hikes by the end of year, compared to seven who saw one hike. In March it was seven versus eight. So you are talking about a change of only one board member after all,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.