“Investors were left empty handed during trading on Friday following the BoJ’s expansion of monetary stimulus which fell below market expectations”, said FXTM Research’s Lukman Otunuga.
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European markets are set to be positive, with futures pointing to a flat start for Britain’s FTSE 100, and higher opens for Germany’s DAX and France’s CAC 40.
The Nikkei-225 average tumbled as much as 1.8 per cent before closing 0.6 per cent higher at 16,569.27.
The BoJ on Fridayy delivered a just a slight change to Japanese monetary policy by voting to increase the amount of exchange traded funds it buys to an annual pace of around 6 trillion yen ($58 billion) from the previous level of 3.3 trillion yen.
The yen was last up 1.1 percent at 104.11 per dollar, with all eyes on the BOJ’s policy decision, which is usually announced some time between 0230 GMT (10:30 p.m. EDT) to 0500 GMT (01:00 a.m. EDT).
“The BOJ may have disappointed, but other central banks remain poised to ease, so we expect macro investors will also be looking to buy the dip in European and United States fixed income”, Mizuho International’s head of European rates strategy, Peter Chatwell, said.
The central bank, however, said it will conduct a thorough assessment of the effects of negative interest rates and its massive asset-buying program in September, suggesting that a major overhaul of its stimulus program may be forthcoming. The index, which touched a seven-week high last week, rose 6.4 percent in July, its best month since October a year ago.
Asian shares touched a one-year peak on Friday, while the yen hit a two-week high in nervous trade as investors waited to see if the Bank of Japan will come up with stimulus that would meet markets’ expectations.
The moves disappointed the markets, which had expected another big influx of liquidity.
WALL STREET: Stocks had another day of meager gains on Thursday as investors worked through a new batch of mixed company earnings, including results from Facebook, Ford and Whole Foods and looked ahead to a meeting of the Bank of Japan. Hong Kong’s Hang Seng index fell 1.3 percent to 21,891.37.
The euro is up by 0.6% at 1.1147 against the dollar even though the preliminary flash estimate showed that euro-area gross domestic product growth slowed to 0.3% in the second quarter, down from the first quarter’s 0.6%. It is up 1 per cent this week, but poised for a 0.2 per cent loss in July.
Clearly the foreign exchange market had been expecting more. Brent crude, used to price global oils, fell 21 cents to $43.02 in London.
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Unemployment fell to 3.1 per cent in June from 3.2 per cent for the past several months. It is down 7.6 per cent this week and 15 per cent this month.
