Asian markets received a boost after the Fed’s announcement yesterday that it would delay the tapering. As borrowing costs are pulled down in the US, the search for yield will again favour Asian economies. India and Indonesia, the deficit countries are already benefitting. Currencies from both countries rose against the dollar. High yield bonds are again attractive. Bernanke mentioned, during the press conference that followed the FOMC statement, that a stronger US recovery would favour emerging markets. This is certainly true, but the exit from unconventional policies is unavoidable and there will be volatility ahead. With the delay, the deficit countries will be able to balance better their adjustment and growth strategies, but they should not put-off reforms. The Governor of the Central Bank of India will likely keep interest rates on hold in the next monetary policy meeting. A reversal of the recent tightening measures seems unlikely. Tapering is still to come and the higher the buffers the better.