Stocks jump worldwide as Bank of Japan rate goes negative

Stocks jumped worldwide and the yen slumped on Friday after the Bank of Japan stunned markets by adopting negative interest rates. Also, hopes the Federal Reserve will slow the pace of future US rate hikes also underpinned stock gains.

The Bank of Japan (BOJ) unexpectedly cut a benchmark rate below zero in a bold move to stimulate the Japanese economy. Volatile markets and slowing global growth have threatened the central bank’s efforts to overcome deflation. Equities surged globally, the yen tumbled and sovereign debt rallied after the BOJ said it would charge 0.1 per cent for excess reserves, an aggressive policy pioneered by the European Central Bank. The BOJ said it may cut rates further if necessary.