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Asian markets rise as Fed signals rates to remain low, China vows to avoid hard landing

HONG KONG - Japanese and Australian stocks led Asian markets higher on Thursday after the Fed signalled that interest rates would remain at record lows and China's leader vowed that the country's economic slowdown would not end badly.

Equity investors had been awaiting the Federal Reserve's economic updates and statements by Chair Janet Yellen, who made clear that although the No. 1 economy was seeing a steadily improving job market and modest inflation, there was no need to raise short-term rates from record lows anytime soon.

The "dovish tone" from the U.S. central bank "saw U.S. equities extend gains to fresh record levels and this has also resonated through to Asian markets," said Stan Shamu, market strategist at IG Markets in Melbourne. "With inflation picking up and unemployment falling, many investors out there were beginning to feel perhaps the Fed might be looking to raise rates sooner."

Separately, Chinese Premier Li Keqiang, the country's top economic official, promised that the world's second-biggest economy, which is undergoing a painful slowdown, would continue to expand moderately and avoid a so-called "hard landing."

"Here, I honestly and officially promise all of you: That will not happen," Li said during a visit to Britain, according to the official Xinhua News Agency. Beijing has an official economic growth target of 7.5 per cent this year.

Japan's benchmark Nikkei 225 jumped 1.6 per cent to 15,353.08 as the dollar was little changed at 101.90 yen. Australia's S&P/ASX 200 also gained strongly, adding 1.6 per cent to 5,460.40.

Hong Kong's Hang Seng climbed 0.3 per cent to 23,250.56 while South Korea's Kospi was flat at 1,989.64.

In mainland China, the Shanghai Composite Index lost 0.5 per cent to 2,045.59.

On Wall Street, the Fed comments reversed a listless slide, with the Standard & Poor's 500 index rising 0.8 per cent to a record close of 1,956.98, a shade higher than the previous high set early last week. The Dow added 0.6 per cent to 16,906.62 and the Nasdaq composite gained 0.6 per cent to 4,362.84.

In energy trading, benchmark crude oil for July delivery 54 cents to $106.51 in electronic trading on the New York Mercantile Exchange. The contract fell 39 cents to close at $105.97 on Wednesday.

The euro edged higher to $1.3595 from $1.3587 in late trading Wednesday.

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