KEEPING SCORE: Japan's Nikkei 225 stock index fell 0.2 percent to 19,838.86 and South Korea's Kospi sank 0.6 percent to 2,358.66.
The dollar index, which tracks the greenback against six major currencies, fell to its lowest level since November 9 in early trading after the release of weaker-than-expected US inflation and retail sales figures.
In its statement following a two-day meeting, the Fed's policy-setting committee indicated the economy had been expanding moderately, the labour market continued to strengthen and a recent softening in inflation was seen as transitory. The yen climbed after the Washington Post reported that Special Counsel Robert Mueller is investigating whether U.S. President Donald Trump attempted to obstruct justice.
The Fed also mapped out a very gradual approach to shrink its US$4.2 trillion holdings of Treasury and mortgage-backed assets that would allow it to begin as early as September.
Risk sentiment was also hit by fear of more USA political turmoil after the Washington Post reported that President Trump is being investigated by special counsel Robert Mueller for possible obstruction of justice.
The Fed said that while inflation has been low, it is expected to soon hit the 2 percent target. Energy and raw-material shares had the biggest declines on the MSCI Asia Pacific Index as oil traded below USD45 a barrel.
Optimism about the global economy also underpinned European equities where the pan-European STOXX 600 was up 0.6 percent, led by industrials and financials.
"It's not that the economy is on life support but it's certainly not robust", Cashin said.
By 0743 GMT in London, the Canadian, New Zealand and Aussie dollars were all a quarter of a percent higher on the day against their U.S. counterpart at respectively C$1.3209, $0.7237 and $0.7558.
The kiwi edged up to 95.07 Australian cents from 94.88 cents yesterday, when figures showed the Australian economy added 42,000 jobs in May, four times as many as expected, while the jobless rate came in lower than expected at 5.5 percent.