Australian Shares Fall

Stocks in Australia fell Thursday, led by banks and iron ore miners, while losses in the rest of Asia were limited after the U.S. Federal Reserve signaled that interest rates could increase more slowly than expected.

The S&P/ASX 200 was down 1.1% at 5532.20.

Australia & New Zealand Banking Group, Commonwealth Bank of Australia and Macquarie Group Ltd. were each lower by roughly 1.5%, after financials also dropped in the U.S.

Iron-ore miners followed the commodity's overnight price decline to trade substantially lower.

In particular, shares of Fortescue Metals Group Ltd. have dropped roughly 7% over the past week as iron ore retreats toward the $60 per ton mark. Fortescue, which continues to shoulder burdensome debt, fell as low as A$2.08 earlier Thursday, its weakest value in almost a month.

Similar losses for crude-oil futures helped push Oil Search Ltd. down 2.3% and Woodside Petroleum Ltd. down 1.3%

Elsewhere in the region, stocks were mixed, after forecasts released by the U.S. Fed on Wednesday showed most officials expect to begin raising short-term interest rates before the end of the year.

Still, Fed officials lowered their interest-rate forecasts for 2016 and 2017 by a quarter percentage point, suggesting they have become less certain about the strength of the U.S. economy in the longer run. The Fed characterized economic growth as moderate in its statement. In the news conference, Chairwoman Janet Yellen reaffirmed that the decision to raise rates would be dependent on economic data.

The Nikkei Stock Average was down 0.7% but the Hang Seng was roughly flat and Korea's Kospi rose 0.3%.

The Japanese yen was at 123.47 against the U.S. dollar, roughly unchanged from 123.43 late Wednesday in New York.

Rhiannon Hoyle and Saumya Vaishampayan contributed to this article.

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