Stocks, emerging market currencies and oil all rallied in Asia on Thursday after Federal Reserve chief Janet Yellen lowered her expectations for U.S. interest rate hikes this year.

In a statement following the Fed's latest policy meeting, Yellen cited concerns about the impact on the U.S. economy of recent turmoil in global markets, weakness in China and Europe, and the plunge in crude prices.

Her comments came after the central bank cut its outlook for U.S. growth for this year and painted a picture of the economy that was less upbeat than many had expected.

But crucially it forecast a slower pace of interest rate rises than foreseen in December, when it announced its first hike in almost a decade.

Yellen said policymakers had opted for “a slightly more accommodative path” given “soft” U.S. business investment and weak exports in recent months.

The prospect of rates staying at ultralow levels for some time boosted U.S. shares, gains that extended into Asian trade.

Tokyo was up 1.4 percent by the break on Thursday, Hong Kong added 1.3 percent, Sydney jumped 1.2 percent and Seoul was 1.1 percent higher. Singapore, Taipei and Manila each put on more than 1 percent.

“The Fed’s stance is relatively friendly,” Mitsushige Akino, executive officer at Ichiyoshi Asset Management in Tokyo, told Bloomberg News.

“The difference in the stance between the market and the authorities has shrunk, and we've managed to get through an important event without drama.”

The dollar tumbled against the yen and euro soon after the announcement and it continued to struggle in Asia, edging up only marginally against the two currencies.

But it sank against emerging currencies, with the South Korean won up 1.6 percent, Australian dollar 1.9 percent higher, Indonesian rupiah 0.7 percent up and Thai baht 0.5 percent higher.

There were also sharp gains for the New Zealand dollar and Singapore dollar. The oil-dependent Malaysian ringgit rallied 1.3 percent.

On oil markets U.S. benchmark West Texas Intermediate surged almost 6 percent Wednesday and Brent more than 4 percent as the weaker dollar makes the commodity cheaper for clients using other currencies.

Adding to buying sentiment was news that key producers including Saudi Arabia and Russia will hold a meeting next month to discuss output levels,with hopes they will agree a freeze.

The jump in crude boosted energy firms, with Hong Kong-listed CNOOC up almost 5 percent and PetroChina 3.5 percent higher.

In Sydney Rio Tinto gained 2.8 percent and BHP Billiton was up 3.3 percent. (AFP)