US markets loved the Fed’s choice of wording and rallied on Wednesday, and MoneyShow’s Jim Jubak thinks it’s important to see how the Tokyo stock market and the Japanese yen react to the news, as well as the emerging markets.

‘Patience’ replaced ‘considerable time’ Wednesday and US markets loved the Federal Reserve’s choice of wording.

The Dow Jones Industrial Average climbed 1.69% by the close. The Standard & Poor’s 500 stock index rose 2.04% and the NASDAQ Composite gained 2.12%.

Instead of a promise to keep rates at the current near zero level for a considerable length of time, the statement from the Fed’s Open Market Committee said that the Fed “can be patient in beginning to normalize” its monetary stance. Still-elevated unemployment and inflation well below the bank’s 2% target give the Fed the flexibility to take a gradual approach to increasing rates.

In her 2:30PM press conference, Fed chair Janet Yellen added more details to the statement. The Fed isn’t likely to begin to raise interest rates before the next couple of meetings. That puts the first interest rate increase in April, at the earliest.

She also said that the Fed won’t be in any hurry to push interest rates higher even after the first increase. “The timing of the initial rise in the Fed funds target, as well as the path for the target thereafter, are contingent on economic conditions,” she said. “Monetary policy will still be very accommodative for a long time” after that first increase.

Considering the extent of selling in the markets over the last few days, it’s no surprise that US stocks rallied Wednesday. The big question is whether the Fed’s ‘patience’ will work to push stocks higher after the first day’s bounce.

I’d watch to see how the Tokyo stock market and the Japanese yen react to the Fed’s wording over the next day or so. Any weakening of the yen against the dollar after the recent strength of the Japanese currency would be a sign that traders don’t feel quite the same need to seek the safe haven of the yen.

The other trade to watch is in emerging markets. It’s unlikely that anything the Fed said Wednesday removed all worries about global growth and emerging market currencies, but a bounce and then stabilization in the emerging markets with better fundamentals—India will be a key tell; markets such as Russia and Brazil have their own big internal problems—would be another sign that the stampede away from risk has at least moderated onto a saunter.

The Fed’s change in language isn’t going to change the dynamics in the oil market, after a brief bounce, perhaps. Oil prices won’t stabilize until the financial markets see signs that demand isn’t falling and that some producers are taking supply off the market. That could take a while.

But at least it looks like the Fed hasn’t added to market worries.