The US central bank on Wednesday approved its biggest interest rate hike since 1994, lifting the target federal funds rate by 75 basis points to a range of between 1.5 percent and 1.75 percent. Fed officials also see further steady rises this year, targeting a federal funds rate of 3.4 percent by year-end.

The move, which had been fully priced in by markets, followed data on Friday showing a sharper-than-expected rise in US inflation in May, as well as a University of Michigan survey showing consumers' five-year inflation expectations jumping sharply to their highest since June 2008.

In a news conference following the Fed's latest two-day policy meeting, Fed Chair Jerome Powell said that the survey was "quite eye-catching".

"[Inflation expectations] are starting to look like they're too high. That I think is one reason why Powell wanted to do a 75 [...] And I think they will also go again in July," said Joseph Capurso, head of international economics at Commonwealth Bank of Australia.

"They've got to get inflation down. They're so far behind the curve it's not funny."

Investors appeared to take comfort from the view that the US economy will benefit in the long run if prices are brought under control in the short term. Fed projections showed economic growth slowing to a below-trend rate of 1.7 percent, and policymakers expect to cut interest rates in 2024.

MSCI's broadest index of Asia-Pacific shares outside Japan tracked a higher close on Wall Street, adding 0.40 percent in the morning session. Seoul's KOSPI added 1.24 percent, while Australian shares rose 0.49 percent and Chinese blue-chips added 0.12 percent.

In Tokyo, the Nikkei was up 1.70 percent.

Overnight, the Dow Jones Industrial Average ended the session by jumping 1 percent. The S&P 500 leapt 1.46 percent, and the Nasdaq Composite climbed 2.5 percent.

The dollar, which retreated from a 20-year peak after the Fed meeting, regained some footing in the Asian session.

"It looked like a classic case of 'buy the rumour, sell the fact' as the dollar sold off and Wall Street rallied," said Matt Simpson, senior market analyst at CityIndex. "[But] given the trajectory for Fed hikes [...] we very much doubt the top is in place for the US dollar."

The global dollar index, which tracks the greenback against a basket of six peers, was last up 0.24 percent at 105.05 as the dollar jumped nearly 0.6 percent against the yen to 134.61.

The euro edged down about 0.1 percent to $1.0434.

Reflecting expectations for more Fed tightening, the yield on US two-year Treasury notes, which are sensitive to traders' expectations of Fed fund rates, rose to 3.3060 percent from a close of 3.2790 percent on Wednesday.

The US 10-year yield was lower at 3.3696 percent from a close of 3.3950 percent.

In commodity markets, oil prices rebounded after falling more than 2 percent following the Fed decision. Brent crude was last up 1 percent to $119.68 per barrel and US crude added 1.1 percent to $116.58.

Gold was slightly lower as the dollar firmed. Spot gold last traded at $1,830.19, down 0.17 percent on the day.