The dollar climbed to a four-week high after the Federal Reserve judged the U.S. economy strong enough to end its asset-purchase program.
Asian stocks fell and the dollar surged to a three-week high versus the yen while MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.6 percent.
In a statement on Wednesday after a two-day meeting, the Fed ended its quantitative easing program of bond purchases. At its peak, the program pumped $85 billion a month into the financial system.
Tokyo's Nikkei bucked the trend in Asia and rose 0.5 percent, taking heart from a significantly weaker yen and as participants focused on the potential positives of the Fed's stance.
The Bloomberg Dollar Spot Index gained 0.1 percent by 1:29 p.m. in Tokyo, with the U.K. pound weakening 0.2 percent and South Korea’s won leading emerging-market currencies lower. Nickel retreated 1 percent and West Texas Intermediate crude oil slid 0.3 percent. Hong Kong’s Hang Seng Index dropped 0.5 percent after its biggest two-day rally in seven months.
Kiwi Drops
The strength of the U.S. currency was a blow to the New Zealand dollar, which tumbled on a softening stance over future interest rate increases by the Reserve Bank of New Zealand.
New Zealand's central bank held its benchmark rate at a five-and-a-half year high on Thursday, but dropped its explicit tightening bias, as it renewed its attack on the high level of the currency.
The New Zealand dollar fell as low as $0.7769 from around $0.7820 before the announcement. The kiwi has slid about 10 percent against the dollar from its three-and-a-half year high in mid-July.