SINGAPORE -- Asian currencies rose on Wednesday after the Federal Reserve slashed interest rates to spur the slowing economy and ease the credit crisis, with the South Korean won and the Indonesian rupiah leading the pack.

The South Korean won briefly hit 999.9 per dollar, up nearly 1.0 percent from Tuesday's close, buoyed by official comments that the won's value is getting back to normal.

Vice Finance Minister Choi Joong-kyung said on Wednesday the won's value was in the process of normalising after having been overvalued, but added it was worried about the increased volatility in the local currency market.

The won tumbled on Monday on news of the sale of investment bank Bear Stearns and the Fed's emergency discount-rate cut, but it has since rebounded after suspected dollar-selling intervention by the central bank to support the ailing currency.

The won remains the worst performer in Asia with a decline of 7.0 percent versus the dollar so far this year.

The Fed slashed its key interest rate to 2.25 percent on Tuesday, which further widened the gaps with Asia's interest rates ranging from 3.25 in Thailand to 8.0 percent in Indonesia.

"Sentiment should continue to improve in the immediate session following the better-than-expected earnings news and a 75-basis-point rate cut from the FOMC (Federal Reserve's Open Market Committee)," JPMorgan analysts said in a note.

Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. on Tuesday said quarterly profits fell by more than half, but results for both investment banks topped forecasts, driving their shares to record one-day gains.

The Indonesian rupiah hit a one-week high at 9,160 per dollar, up nearly 0.7 percent, as investors bought into the high-yielding currency.

"People had expected the Fed to cut rates by at least 75 basis points. The market was already short (on the dollar) from yesterday," said a trader in Jakarta.

"But some investors took profit around the 9,175-9,190 level, besides some dollar demand from oil companies," he added.

Wall Street expects the Fed to cut interest rates further next month, but any future cuts are likely to be smaller.

Meanwhile, the Chinese yuan gapped up at the opening and then hit a post-revaluation high at 7.0648 per dollar, up 0.24 percent from Tuesday's close, as the central bank kept up efforts to fight inflation.

In a further move to tighten policy, the central bank on Tuesday raised bank reserve requirements by 50 basis points to a record 15.5 percent, the second increase this year.