Asian Shares Rebound After Fed Renews Dovish Credentials

Asian shares bounced back and the dollar fell on Thursday after minutes of the US Federal Reserve's latest policy meeting showed policymakers have some concerns about downside risks to the global economy and the dollar's strength.

Japan's Nikkei share average rose 0.8 per cent while MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.5 per cent.

The minutes of the Fed's September 16-17 meeting showed officials are struggling with how to come to grips with the dual threats of a stronger dollar and a global slowdown as they seek an eventual exit from low interest rates.

"The overall tone of the minutes was that the Fed will manage its policy so as not to damage a fragile economy, paying attention to various downside risks," said Tohru Yamamoto, chief fixed income strategist at Daiwa Securities.

"There's absolutely no indication of an early rate hike," he added.

US interest rate futures reacted vividly to the minutes, with June 2015 eurodollar interest rate futures hitting a contract high as traders scaled back expectations that the Fed will raise rates by June.

The rate sensitive two-year US Treasury note yield hit a seven-week low of 0.444 per cent. The 30-year bond yield dropped to a 17-month low of 3.039 per cent.