A lack of fresh stimulus from the Bank of Japan sent the yen soaring and world stocks into the red on Thursday, half a day after the U.S. Federal Reserve signaled it too was hitting the policy pause button.
The yen JPY= surged almost 3 percent against the dollar, the euro and sterling in a sharp reaction to the BOJ inaction, putting it on course for its biggest jump against the greenback since February and in five years against the two European currencies.
Markets were also readying for one of the biggest bits of data of the year so far, the U.S. first quarter gross domestic product reading scheduled for 8:30 a.m. ET (1230 GMT).
Tokyo’s Nikkei .N225 slumped 3.6 percent, the pan-European FTSEurofirst 300 .FTEU3was down over 1.2 percent and futures markets pointed to Wall Street losing as much as 0.8 percent when it reopens. [.N] ESc1
The BOJ’s decision to hold steady in the face of soft global demand and a sharp rise in the yen was particularly jarring for markets after media reports ahead of the meeting had said it wanted to go deeper into negative interest rates. Read more