The Fed’s policy-setting committee also noted that U.S. job growth had slowed and the unemployment rate had held steady.
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“Obviously the first move [in stocks] is down, which is conventional wisdom”.
Government data showed Thursday morning that Japan’s industrial output in September rose a seasonally adjusted 1.0 percent from the previous month, beating market expectations of a slight decline.
Short-term interest rates in the United States have been at record lows, pegged at 0 to 0.25 per cent, since December 2008.
“The Fed language on tightening in December was a stronger indication than we ve had from them in a long time about going soon”, Imre Speizer, a senior market strategist at Westpac Banking Corp., told Bloomberg News.
The S&P/ASX was off 0.64%, while the Nikkei 225 inched up 0.07%.
Investors quickly placed bets reflecting a higher chance the USA central bank will raise rates in December, with futures contracts implying a 43 percent possibility compared to 34 percent prior to the statement.
“Everything will come down to the incoming data between now and mid-December”, Paul Ashworth, chief USA economist at Capital Economics, said Wednesday after the Fed revealed its latest thinking.
Other central banks around the world are closely watching the Fed’s process and a decision to increase rates is likely to lead to rates being raised across the world.
The dollar hovered just below its 2-1/2-month high against a basket of currencies on Wednesday as traders looked for more signs from the Federal Reserve that US interest rates are on course to rise.
ENERGY: Oil prices fell back after soaring when Pemex, the national oil company of Mexico, said it received permission to swap crude oil with the USA, possibly ending the US ban on exporting crude.
Market attention is also on a spate of key economic data, including US gross domestic product for the July-September quarter, due later in the day, and Japanese consumer price and employment readings for September, due Friday. The Standard & Poor’s 500 index rose 1.18 percent to 2,090.35 on the day.
USA gold futures for December delivery settled down 2.4 per cent at $US1,147.30 an ounce.
A statement the Fed issued Wednesday said it would monitor job growth and inflation to determine “whether it will be appropriate to raise the target range” for its benchmark rate at its next meeting.
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Shanghai Composite Index was up 0.36% at 3387.32 while Hong Kong’s Hang Seng was down 0.60% at 22,819.94.
