Asian shares extended losses on Thursday after the Federal Reserve took an upbeat view on the U.S. economy and signalled that it remains firmly on track to raise interest rates this year, despite an uncertain global outlook. "European equities are set to open lower following last night's FOMC statement," Jonathan Sudaria, a dealer at Capital Spreads, said in a note. Japan's Nikkei (.N225) slipped 1.1 percent to mark its biggest one-day drop in two weeks, while MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.1 percent. The Fed said that international developments would be taken into consideration, but noted that falling energy prices boosted household purchasing power even as it acknowledged a decline in certain inflation measures.
The Federal Reserve on Wednesday said the U.S. economy was expanding "at a solid pace" with strong job gains in a signal that the central bank remains on track with its plans to raise interest rates this year. The Fed repeated it would be "patient" in deciding when to raise benchmark borrowing costs from zero, though it also acknowledged a decline in certain inflation measures. After a two-day meeting of the Federal Open Market Committee, policymakers struck an upbeat tone on the U.S. economy's prospects and held to their view that energy-led weakness in inflation would dissipate. "The committee, in fact, was downright bullish on current economic conditions and the outlook," said Paul Edelstein, director of financial economics at IHS Global Insight.
Facebook Inc's (FB.O) revenue grew 49 percent in the fourth quarter, as mobile advertising growth helped the world's largest Internet social network beat Wall Street's targets for earnings and sales. Facebook shares fell about 2.6 percent in after-hours trade after vacillating above and below the closing price. Facebook's business has boomed thanks to its mobile ads for smartphones and tablets. Its success contrasts with other established Internet companies such as Google Inc (GOOGL.O) and Yahoo Inc (YHOO.O), which have struggled as advertisers shift more and more to mobile devices from personal computers.