ENLARGE

An investor follows the stock market at an exchange hall in Fuyang, China, on Tuesday. PHOTO: GETTY IMAGES

Shares in the Asia Pacific region finished mostly up Wednesday, after the U.S. Federal Reserve signaled a slow pace on raising interest rates.

The gains add to a surge in the region’s stock markets in March after four straight losing months: Shares in China and Hong Kong, for example, are both up more than 8% since the beginning of the month.

On Wednesday, Chinese shares led gains amid local speculation about an additional state-owned player supporting the market. The Shanghai Composite Index finished up 2.8% at 3000.64, with buying momentum picking up in the afternoon.

Elsewhere, Hong Kong’s Hang Seng Index closed up 2.2%, South Korea’s Kospi was up 0.4% and Australia’s S&P ASX 200 edged up by 0.1%.

Japan’s Nikkei Stock Average fell 1.3%, however, as the Japanese yen strengthened against the U.S. dollar. A stronger local currency tends to hurt the competitiveness of Japanese exporters.

The main driver in the region Wednesday was Janet Yellen’s comments overnight that global economic uncertainty warranted a cautious approach when raising rates.

“[Ms. Yellen] and the Fed have finally realized that the only way they can safely start to normalize interest-rate policy in the U.S. is if they pay attention to the problems the dollar is creating in the rest of the world,” said Brett F. Ewing, chief market strategist at First Franklin Financial Services.

Overnight, the Dow Jones Industrial Average and the S&P 500 closed at their highest levels of the year, with the latter up 0.5% and returning to positive territory for 2016.

“Asian markets should continue to outperform the U.S. markets in any environment that the dollar is moderating,” Mr. Ewing said. He also said he believes the Fed will hold rates steady in April.

Higher U.S. rates boost the dollar by making the currency more attractive to yield-seeking investors, weakening other global currencies. Worries about that happening and in turn pressuring emerging market stocks have eased since the Fed has slowed down its path to raise rates.

Investors have stepped up buying in Asia this month: In March, foreign investors pumped $10.5 billion into emerging Asian equities outside of China, according to a report by Credit Suisse published Wednesday. The firm said that marked the ninth largest month of buying into that region since its data started a decade ago. Foreign buying, it added, was largely concentrated in Taiwan, South Korea and India.

In China, Bank of Communications Co. Ltd. disclosed in its 2015 annual report Tuesday that an investment firm controlled by the China’s foreign-exchange regulator owned 1.07% of the bank’s shares. This stirred expectations of continued government intervention in the stock market, which remains down 42% from its peak in June.

—Yifan Xie contributed to this article.