The dollar dropped after the Federal Reserve on Wednesday cut interest rates by half a percentage point, citing greater confidence that inflation will continue to recede to the U.S. central bank's 2% annual target.

Asian stocks wobbled on Tuesday while the dollar and U.S. Treasury yields came under pressure, with just a day to go before the expected start of the Federal Reserve's easing cycle that could see policymakers deliver an outsized rate cut.

The U.S. currency dropped back sharply against the yen, handing back about half of its rally from Tuesday, when unexpectedly robust U.S. retail sales data was taken as weakening the case for aggressive Fed easing.