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Gold was in sight of $1,300 an ounce, having hit a record high overnight after the Fed said it was ready if needed to add more stimulus and that inflation was running below where it would like it to be.

Asia ex-Japan stocks .MIAPJ0000PUS rose 0.7 percent to a near two-year high, though trading volumes were thinned out by holidays, while U.S. stock futures climbed 0.5 percent.

The increasing possibility that the Fed will buy Treasuries to stimulate demand lifted government bonds, while the prospect of investors having access to even more cheaply borrowed money supported riskier investments such as equities.

"The FOMC seems to be considering more bond purchases predominantly because of concerns over deflation and not over growth. In consequence, Asian risky assets should benefit from the additional liquidity rather than suffering from weakening prospects for regional exports to the United States," Dariusz Kowalczyk, senior economist and strategist at Credit Agricole CIB in Hong Kong, said in a note.

The falling dollar pushed up the yen and kept traders on high alert for signs that Japan was intervening in markets again to push its currency back down.

Japanese Prime Minister Naoto Kan said intervention in the foreign exchange markets would be "unavoidable" if there was a drastic change in the currency. He also told the Financial Times in an interview that Tokyo planned a "total" package of measures that would boost domestic demand and help to weaken the currency.

The dollar fell 0.3 percent against the yen to 84.87 yen, just below where traders had thought Japan's central bank would support it.

Japanese authorities intervened in currency markets last Wednesday to weaken the yen for the first time since 2004, but the dollar has met selling pressure from exporters around 86 yen. Tokyo has not been seen in the market since.

DOLLAR OUTLOOK DARKENS

The euro rose to $1.3310, the highest since Aug 6, while the dollar weakened across the board.

"I doubt the market will step back from selling the U.S. dollar much for the time being until the U.S. data starts to improve," said Greg Gibbs, currency strategist at Royal Bank of Scotland in Sydney.

The relatively high yielding Australian and New Zealand dollars outperformed other liquid currencies, rising 0.3 percent and 0.4 percent, respectively, with dealers focusing on the widening yield advantage of these countries against U.S. bonds.

The 10-year U.S. Treasury future was up 0.3 percent while in the cash market, the benchmark 10-year yield slipped 3 basis points compared with late on Tuesday in New York to 2.55 percent.

The spread of the U.S. 10-year yield over the German 10-year yield has shrank to a negligible 8 basis points from around 40 basis points only two weeks ago.