Across Asia-Pacific, declines are being led by Japan and South Korea as investors process Fed comments.

• On Thursday, the markets in the Asia-Pacific region saw a decline, with investors taking time to process the information provided in an update from the U.S. Federal Reserve.
• It is likely that the Federal Open Market Committee will increase its benchmark short-term borrowing rate by a quarter-percentage point.
• Inflation stateside is running at its hottest level in nearly 40 years.

The U.S. Federal Reserve's overnight update indicating that it plans to raise interest rates as soon as March caused Asia-Pacific markets to broadly fall on Thursday.

The Nikkei 225 in Japan fell 3.11% to 26,170.30 while the Topix declined 2.61% to 1,842.44. In South Korea, the benchmark dropped 3.5% to 2,614.49. The S&P 500 in the US and the tech-focused Hang Seng Tech index in Hong Kong also slipped, with the S&P 500 declining 1.99% to 23,807 and the Hang Seng Tech index dropping 3.81% to 5,383.63, respectively.

The Shanghai Composite and the Shenzhen Stock Exchange both experienced declines in their share prices.

In Australia, the market retraced early gains and ended 1.77% lower at 6,838.30.

In afternoon trade, India's market dropped 1.19%, while Singapore's market fell 0.44%. However, Indonesia's market managed to erase its losses and rose 0.16%.

The MSCI Asia ex-Japan index was down 2.14%.

The Dow Jones Industrial Average fell 129 points on Thursday after gaining over 500 points earlier in the day, following the Fed's update.

The Taiwan market was closed for a holiday on Thursday.

Tech shares fall

In South Korea, Samsung Electronics' shares dropped 2.73% following a 53% increase in operating profit in the fourth quarter of 2021 compared to the previous year, despite a 12% decline from the previous three months.

The chipmaker predicts that its memory business will see growth in server demand in 2022 due to increased IT investments, but supply chain challenges will continue.

The major Chinese tech shares listed in Hong Kong experienced a significant decline, with drops of 7.19%, 3.51%, 6.93%, 4.04%, and 2.24%. Additionally, the Chinese video platform also experienced a sharp decline of 9.93%.

Following a report that merchants in Australia will be able to receive payments with a phone tap instead of using hardware attachments like those produced by Square, shares trading in Australia fell 5.35%.

Jack Dorsey founded and led the company known as Block, which was previously known as Square.

Fed meeting, U.S. markets

The Fed is likely to increase its benchmark short-term borrowing rate by a quarter-percentage point, marking its first hike since December 2018.

At a news conference, Fed Chair Jerome Powell stated that the U.S. central bank has "quite a bit of room to raise interest rates without harming the labor market." Despite inflation running at its highest level in nearly 40 years in the U.S., Powell indicated that the central bank has the ability to increase interest rates without negatively impacting the labor market.

The Fed's post-meeting statement did not specify a particular time for the hike, but hints suggest it could occur as early as the March meeting.

The Fed continued discussing balance sheet normalization during the meeting and released principles on its approach to shrinking the balance sheet. The ANZ analysts emphasized the importance of making the process predictable while being sensitive to the economy and markets.

Maybank analysts stated in a Thursday note that markets perceived Powell's comments as a "hawkish shift" in the Fed's stance and are pricing in nearly 5 interest rate hikes this year.

Oil prices retreat

On Thursday, oil prices dropped by 0.14% to $87.23 during Asian trading hours, while the global benchmark also decreased by 0.13% to $89.84 per barrel.

Prices rose more than 2% in overnight trade as tensions between Russia and Ukraine escalated, with fears of Moscow's invasion remaining. Brent hit $90 at one point but pulled back slightly.

On Thursday, two ballistic missiles were reportedly fired by North Korea, according to South Korea's military, bringing the total number of missile tests this month to six.

The price of gold fell by 1.8% after the Fed's latest comments, reaching its lowest point in a week at $1,815.06, according to Reuters. It had previously traded at $1,811 in Asia on Thursday, dropping 0.37%.

Currencies

The greenback, which is tracked against a group of its peers, increased by 0.92% to reach 96.827.

Carol Kong from the Commonwealth Bank of Australia stated in an afternoon note that USD gained further in the Asia session, surpassing its 4 January high of 96.46. If US equities continue to decline, the world's reserve currency may challenge the 96.94 resistance level.

U.S. futures traded lower Thursday during Asian trading hours.

The dollar weakened from an earlier level of 114.45 to 114.84, while the euro fell 0.6% to $0.7071.

The report was contributed to by Saheli Roy Choudhury, Jeff Cox, Hannah Miao, and Fred Imbert of CNBC.