US government bonds rose after US claims for unemployment benefits rose by more than expected last week, dimming expectations for growth in the closely watched non-farm payrolls numbers due on Friday.

The Fed on Wednesday said it would spend $600 billion buying longer-term Treasury bonds through to the end of next June as part of a renewed quantitative easing (QE) program.

This was a little more than expected, but not enough to spook markets with worries about a worse-than-anticipated US economic picture.

“The Fed did leave the door open and could take further action later down the road. That might be another factor boosting investor confidence,” said Keith Bowman, equity analyst at Hargreaves Lansdown in London.

“We have got another major hurdle to come this Friday with the release of US jobs data. The Dow Jones industrial average was up 126.93 points, or 1.13 percent, at 11,342.06. The Standard & Poor’s 500 Index was up 12.41 points, or 1.04 percent, at 1,210.37. The Nasdaq Composite Index was up 24.94 points, or 0.98 percent, at 2,565.21.

MSCI’s all-country world stocks index rose 1.85 percent on the day taking the index to a level last seen before the collapse of investment bank Lehman Brothers in September 2008. MSCI’s emerging market index gained 1.6 percent.

The pan-European FTSEurofirst 300 index of top European shares was up 1.36 percent climbing to six-month highs and Japan’s Nikkei closed up 2.17 percent.

“The (Fed) result was slightly pleasantly surprising,” said Jonathan Schiessl, investment manager at wealth managers Ashburton in Jersey. “The risk trade is back on.” The trade, which has been running on and off since QE was first anticipated in late August, essentially involves buying emerging markets for their better growth prospects and potential currency appreciation.

The US dollar slumped hitting a 28-year low versus the Australian currency and a more than nine-month trough against the euro as a Federal Reserve decision to print more money to buy $600 billion in Treasuries prompted investors to seek returns elsewhere.

The dollar, seen as “the victim,” fell against a basket currencies, with the US Dollar Index down 0.94 percent at 75.76.

The euro was up 0.79 percent at $1.4255, a nine-month high. Euro gains are being restrained by concerns over euro zone debt, particularly in Ireland and Greece.

Against the Japanese yen, the dollar was down 0.54 percent at 80.60 from a previous session close of 81.040.

The Fed’s commitment to purchase Treasuries, implying low funding costs, brought into focus an expected increased use of the dollar in carry trades, in which the US currency is used to fund purchases in commodities, emerging markets and higher-yielding currencies.

US government bonds were higher, but appetite for Treasury supply in the post-Fed announcement world will be gauged later in the day in an auction of $10 billion of reopened 10-year Treasury inflation-protected securities.

The benchmark 10-year US Treasury note was up 29/32, with the yield at 2.4728 percent. The 2-year US Treasury note was unchanged with the yield at 0.332 percent. The 30-year US Treasury bond was up 1/32, with the yield at 4.05 percent.

The Fed’s strategy is to prevent a slide in inflation from becoming a deflationary spiral of falling wages, growth and business activity, and market players say a dramatically steeper yield curve may be the new norm.

In energy and commodities prices, US light sweet crude oil rose $1.53, or 1.81 percent, to $86.22 per barrel, and spot gold prices rose $28.45, or 2.11 percent, to $1376.10 an ounce as the dollar weakened.