GLOBAL MARKETS-Stocks falter as Fed fails to offer fresh cause for cheer

* S&P500 futures, Asia shares down 1%
* Outflows from U.S. tech shares continue
* Fed suggests low rates until 2023
* Dollar gains broadly, yen eyes Suga's policies
* European shares seen falling about 1%

By Hideyuki Sano
TOKYO, Sept 17 (Reuters) - Stocks fell and the dollar
advanced on Thursday after the Federal Reserve pledged to keep
interest rates low for a long time but stopped short of offering
further stimulus to shore up a battered U.S. economy.
European stocks are expected to follow suit, with the
futures for the bellwether Euro Stoxx 50 index trading 0.96%
lower STXEc1 in early trade.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS lost 1.01%, running out of steam after five
straight days of gains. Japan's Nikkei .N225 shed 0.63%.
U.S. S&P 500 futures ESc1 fell 1.03% in Asia on Thursday
following a 0.46% drop in the S&P 500 .SPX on Wall Street.
Tech shares fared worse, with the Nasdaq Composite .IXIC
dropping 1.25% on Wednesday. Nasdaq futures NQc1 fell 1.14% in
Asia.
"In essence, high-tech shares were overbought and we've seen
a correction since early this month," said Soichiro Monji, chief
strategist at Nishimura Securities in Kyoto. "I think that is
still continuing, with the Fed just being a fresh trigger."
The Fed said it would keep interest rates near zero until
inflation is on track to "moderately exceed" the central bank's
2% inflation target "for some time." New economic projections released with the policy statement
showed most policymakers see interest rates on hold through to
at least 2023, with inflation not breaching 2% over that period.
"Of course, sensible people wouldn't really hold anyone to
macro forecasts that far out so we'll cross that bridge when we
get to it," said Derek Holt, head of capital markets economics
at Scotiabank in Toronto.
"Nevertheless, markets are priced for basically one outcome
here and that is little inflation and no hikes for years to
come."
Still, with such expectations considered a foregone
conclusion by many investors, there was some disappointment in
the market.
"By and large the Fed delivered the minimum of what had been
expected by markets with a key focus on the implications of a
move to 'flexible' inflation targeting," said Stephen Miller,
investment strategist at GSFM in Sydney.
The 10-year U.S. Treasuries yielded 0.677% US10YT=RR , a
few basis points above its levels before the Fed.
The U.S. dollar gained against most other currencies.
The euro dropped 0.4% to $1.1767 EUR= while the Australian
dollar lost 0.4% to $0.7278 AUD=D4 , having erased earlier
gains made after stronger-than-expected local jobs data.
The Chinese yuan also dropped about 0.35% to 6.7686 per
dollar CNH=D4 , stepping back from a 16-month high hit on
Wednesday.
The yen was little moved at 104.98 to the dollar JPY=
having hit a 1-1/2-month high of 104.80 per dollar overnight.
With focus on new Prime Minister Yoshihide Suga, who is seen
by some as a strong opponent of a higher yen, some traders said
the market may be tempted to test his resolve on the currency.
"One interesting speculative trade in the near-term will be
to long the yen ahead of the coming long weekend in Japan," said
a senior trading manager at a major Japanese bank.
The Bank of Japan maintained its policy as widely expected.
As the dollar gains, oil prices gave up some of their big
gains made on Wednesday on a drawdown in U.S. crude and gasoline
inventories, with Hurricane Sally forcing a swath of U.S.
offshore production to shut. O/R
Brent crude dropped 0.99% to $41.80 per barrel LCOc1 while
U.S. crude CLc1 fell 1.2% to $39.68 per barrel.
Gold also slipped 0.8% to $1,943.8 per ounce XAU= .

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Fed "dot plots" https://tmsnrt.rs/2FEvjyV
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