The US central bank also discarded its promises of "further gradual increases" in interest rates, and said it would be "patient" before making any further moves amid signs of global economic slowdown and a damaging trade war with China. Rising US borrowing costs in 2018 had led to massive capital flight from emerging markets, prompting regional central banks to hike rates to reduce the rate differential and combat a stronger US dollar.
"Markets clearly like the newly dovish Fed, which had exceeded expectations for dovishness in the midst of a positive output gap and tight labour market," Mizuho Bank said in a client note. Indonesian shares jumped 1.1 percent, boosted by financial and industrial stocks. The index rose 5.5 percent in January in its third straight monthly gain.
Bank Central Asia and Unilever Indonesia gained about 2 percent and 1.9 percent, respectively. An index of the country's top 45 liquid stocks climbed 1.5 percent to its highest since April 2018. Philippine shares closed 0.3 percent higher after gaining as much as 1.5 percent earlier in the session.
The benchmark stock index pared its gains after the central bank said January annual inflation is likely to settle within a range of 4.3 percent to 5.1 percent, above its target of 2-4 percent for 2019. Surging inflation had dented consumption and put pressure on the peso in 2018, prompting Bangko Sentral ng Pilipinas to hike its benchmark rate five times.
The Philippine stock index added 7.3 percent in January, in its sharpest monthly gain since March 2016. Gains in energy and financial stocks helped Thai shares rise about 0.6 percent to a near 8-week closing high. Index heavyweights PTT and PTT Exploration and Production climbed 0.5 percent and 1.7 percent, respectively. Elsewhere, Vietnam shares ended 0.6 percent lower, while Malaysian shares retreated from early gains to close flat.