YEN FIRMS AS BOJ DISAPPOINTS, STOCKS RISE
Baku, August 30 (AZERTAC). The yen rose and Japanese shares gave up some of their strong early gains on Monday after the Bank of Japan made only minor tweaks in policy, disappointing markets looking for more aggressive action against deflation.
In an emergency meeting, Japan`s central bank voted to expand its cheap fixed-rate loan programme for banks, but stopped short of bolder steps to stem a rise in the yen that has threatened the country`s already fragile economic recovery.
Leading European shares rose for a third straight session, mirroring gains in Asia and on Wall Street on Friday after Federal Reserve Chairman Ben Bernanke downplayed concerns that the slowing U.S. economy might slip back into recession.
S&P 500 futures rose 0.4 percent, pointing to a stronger opening for U.S. markets later in the day.
Tokyo`s Nikkei ended up 1.8 percent after rising more than 3 percent before the BOJ announcement, while Japanese government bonds pulled back sharply from their intraday lows.
Asian stocks outside Japan rose 1.3 percent.
Bank of Japan Governor Masaaki Shirakawa said the central bank needs to carefully examine the drawbacks when considering already low interest rate but did not rule out any specific policy option in case the economy worsens.
The strengthening Japanese currency, which hit a 15-year high of 83.58 yen against the dollar last week, has taken its toll on the country`s exporters, pushing the Nikkei down nearly 20 percent since its peak in early April.
The yen firmed against the dollar after the BOJ`s move, which was seen by investors as a symbolic gesture that would do little to halt the currency`s climb and may prolong deflation.
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