Asian shares pulled back from recent rallies on Thursday but optimism about global growth supported sentiment as the Federal Reserve kept its stimulus policy, while the euro steadied on signs the region was stabilizing from the debt crisis.
The MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS inched down 0.1 percent after rising to nearly an 18-month high the previous session.
Australian shares .AXJO also edged down 0.1 percent, retreating from a 21-month high hit on Wednesday. The shares had gained for 10 straight days, the longest winning run since October 2003.
South Korean shares .KS11 opened down 0.2 percent and Japan's benchmark Nikkei stock average .N225 also opened 0.5 percent lower after soaring 2.3 percent to a 33-month high the day before. .T
"The Nikkei is at a very high level. I think we will see some profit-taking in today's market," said Takashi Hiroki, chief strategist at Monex Inc.
The Fed on Wednesday kept its monthly bond-buying plan while indicating a recent stall in U.S. economic growth was likely temporary and predicting the nation's job market would continue to improve at a modest pace. The Fed repeated a pledge to keep purchasing securities until the outlook for employment "improves substantially.
The statement preceded Friday's monthly nonfarm payrolls data but followed a report showing the U.S. economy unexpectedly shrank in the fourth quarter for its first drop since the recession ended over three years ago, as inventory investment slowed and government spending plunged.
Analysts say, however, the private sector spending components such as personal consumption, business investment and housing were strong to underline a moderate recovery trend.
U.S. stocks pulled back after the Fed announcement in a move many saw as a reaction to gains in recent months, with the Standard & Poor's 500 Index .SPX on track to post its best month since October 2011 and its best January since 1997.
European shares suffered their biggest daily drop this month after gloomy earnings and weak U.S. economic data hit sentiment, having touched 2-year highs earlier in the week.
EURO ADVANTAGE INTACT
The euro held near a 14-month high of $1.3588 scaled on Wednesday after the Fed pledged to keep its current bond-buying stimulus scheme.
Reports from the euro zone on Wednesday underscored views that the debt crisis-hit region may be overcoming the worst, with economic sentiment improving more than expected across all sectors in January and a gauge for the phase of the business cycle also rising this month.
"The rise in the EUR is a sign of the success of the European Central Bank on the credit front, which matters far more than a short term rise in EURUSD. Money is flowing into Europe and from North back to the South or from ECB funding to money market funding," Sebastien Galy, strategist at Societe Generale, said in a note to clients.
A weaker dollar as a result of expectations that the Fed's loose monetary policy will stay intact for a long time underpinned gold, lifting it as much as 1.1 percent to a one-week high of $1,683.39 an ounce on Wednesday. Spot gold steadied around $1,676.71 early on Thursday.
The dollar maintained its advantage against the yen, with expectations that the Bank of Japan will unveil drastically accommodative monetary policy in coming months firmly capping 10-year Japanese government bond yields below 0.8 percent. In contrast, the benchmark 10-year U.S. Treasury yield has inched up to around 2.00 percent.
The dollar was at 90.99 yen after reaching 91.41 yen on Wednesday, its highest since June 2010. The euro traded at 123.43 yen, not far from Wednesday's high of 123.87, its loftiest since May 2010.
U.S. crude futures was up 0.1 percent to $98 a barrel early on Thursday. Brent crude hit a three-month high on Wednesday as Europe's economic data spurred optimism about the global economy, overshadowing weak U.S. GDP.