Stock indices in the Asia-Pacific region were mostly up on Thursday morning, with gains in U.S. stocks and bonds providing support to the market. Investors breathed a sigh of relief after the US Federal Reserve’s latest monetary policy decision came as expected and averted fears of a larger-than-expected rate hike.

China’s Shanghai Composite index was up 0.53% by 22:00 ET (02:00 GMT), while the Shenzhen Component was down 0.79%. The Chinese market reopened after the holiday, with Caixin’s April 2022 services business activity index coming in at 36.2.

Australia’s ASX 200 Index is up 0.63%; with data released this morning showing that building approvals for March 2022 fell 18.5% month-on-month. The data also showed that exports rose 0% and imports fell 5% month-on-month, while the trade balance totaled A$9.314 billion ($6.66 billion).

Hong Kong’s Hang Seng Index rose 1.22%.

Japanese and South Korean markets are closed due to a holiday.

Australian debt securities rose after 2-year U.S. Treasury yields fell, while cash Treasury trades in Asia are off due to a holiday in Japan.

The U.S. Federal Open Market Committee of the Federal Reserve raised the interest rate to 1 percent, its biggest increase since 2000, when it handed down its decision on Wednesday. Fed chief Jerome Powell said the 75 basis point “super hike” feared by investors “is not something the committee is actively considering,” adding that officials consider a level of the federal funds rate in the 2% to 3% range to be “neutral.”

“The market pretty much priced in today’s action,” Doubleline Group LP fund manager Ken Shinoda said in an interview with Bloomberg.

“In fact, I think today’s action was a little less hawkish than perhaps some people expected.”

The Fed also said it will allow its holdings of Treasuries and mortgage-backed securities to shrink by $47.5 billion a month in June, gradually increasing over 3 months to $95 billion.

Market reaction is likely to vary as investors “digest” Powell’s comment, but swaps tied to Fed meetings are currently pricing in further rate hikes of less than 150 basis points over the Fed’s June, July and September meetings in 2022.

“The market is overly optimistic about the Fed’s ability to curb inflation,” Nancy Davis, chief investment officer at Quadratic Capital Management LLC, said in a note.

“We could be facing a stagflationary environment.”

Continuing risks include monetary tightening, as well as the ongoing conflict in Ukraine and China’s COVID-19 outlook. The European Union is also planning to ban Russian oil exports over the next 6 months, while wheat prices are rising due to the possibility of export restrictions by India, a major producer.

Across the Atlantic, the Bank of England will deliver its monetary policy decision a little later today when it is expected to raise the rate to its highest level in 13 years.

The US will release its employment report, including non-farm payrolls, a day later.