TOKYO: Asian shares fell on Friday after the Federal Reserve held off on raising interest rates, reviving concerns about weakness in both the US and global economies. The dollar was on the defensive, having fallen more than 1 percent after the Fed's decision, while US bond yields plunged, erasing their sharp rises in the past couple of days. The Nikkei average fell nearly 2 percent and MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.2 percent. Major Wall Street indexes gave up a 1 percent rally to end lower, with the S&P 500 index losing 0.3 percent. S&P futures dipped 0.2 percent in the Asian morning. Fed Chair Janet Yellen said the outlook abroad has appeared to become less certain, adding that recent falls in US stock prices and a rise in the value of the dollar already were tightening US financial market conditions. Yellen said she wanted to see more improvement in the US labour market and expressed concern over weak inflation. Referring to the global outlook, Yellen explicitly said the central bank was focusing on the slowdown in China and emerging markets, saying one key issue is whether there might be a risk of a more abrupt slowdown in China. 'I think today's decision will prove positive for markets in the end. But volatility is likely to remain high as markets, like the Fed, will still have to confirm the US economy is withstanding the adverse impact from the global economy,' said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management. Analysts and traders had been nearly evenly split on whether the Fed would raise rates for the first time in nearly a decade, though markets had priced in only a one-in-four chance of a hike. The Fed's fresh economic projections showed 13 of 17 policymakers still foresee raising rates at least once in 2015, down from 15 at the last forecast made in June. Financial markets, which have constantly forecast a far slower pace of policy tightening than the Fed's projections, were less convinced. Instruments such as federal fund futures and overnight indexed swap are pricing in only about one in two chance of a rate hike by the end of year. The Fed's decision to keep rates at zero could give some relief to emerging markets, which have long suffered capital outflows on expectation of higher US rates. The Malaysian ringgit, one of the worst hit currencies this year because of low oil prices as well as Malaysia's relatively small foreign currency reserves, rose about 0.5 percent in early trade. But trade-reliant Asian economies are likely to remain under pressure as China's economy slows. As the prospects of higher interest rates down the road had been a major attraction for the dollar, the US currency was wobbly against many other currencies. The dollar index against a basket of major currencies was little changed at 94.559 on Friday, having fallen to three-week low of 94.360 on Thursday. The euro jumped to a three-week high of $1.14415 while the British pound also hit a three-week high of $1.5628. The yen also edged up 120.12 to the dollar from Thursday's low at 120.995. Longer-dated US debt yields plunged, with the two-year notes yield dropping to 0.686 percent, returning to its familiar range only a day after it hit a 4 1/2-year high of 0.819 percent. The 10-year notes yield slipped to 2.192 percent from Wednesday's 1 1/2-month high of 2.303 percent. Commodity prices were relatively well-supported with US crude futures last trading at $46.83 per barrel, down slightly from Thursday's high of $47.71 but still up almost 5 percent on the week. Gold hit a two-week high of $1,136 per ounce.