Dow Jones closed down by 0.70 percent, S&P 500 ended down by 0.56 percent, Nasdaq finished the day down by 0.63 percent.
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The 10-year Japanese government bond yield fell 2.0 basis points to minus 0.050 per cent while the 30-year yield fell 5.0 basis points to 0.460 per cent, hitting a two-week low.
Oil prices rose about 1.8 per cent as the dollar fell and USA crude inventories recorded a surprise drop. US benchmark crude was up $1.08 to $46.41 a barrel, while Brent crude, used to price Global oils, rose 92 cents to $47.75 a barrel. Treasury prices and yields move in opposite directions.
Decisions by the Fed and the Bank of Japan on Wednesday helped reassure investors that major central banks weren’t imminently pulling back from easy-money policies.
“When an uncertain event is lifted, the markets lift correspondingly”, said Jeffrey Yu, head of single-stock derivatives trading at UBS Group AG.
Minneapolis Fed President Neel Kashkari, responding to questions from the public on Twitter, said he believed the labor market continues to have slack and that he wanted to see the unemployment rate, now at 4.9 percent, to come down.
On Wall Street, the S&P 500 Index gained 0.65 per cent, led by a 1.9-per cent gain for the real estate sector.
Oil prices also gained after official data on Wednesday showed a surprise drop in USA crude inventories last week.
In corporate news, energy stocks rallied on the increase in oil prices including Transocean Ltd., Murphy Oil Corp., Diamond Offshore Drilling Inc. and ConocoPhillips.
With oil prices rising for the second straight day thanks in part to a surprisingly large drop in USA crude inventories, oil-linked currencies like the Canadian dollar, Colombian peso and Russian rouble all gained against the dollar. Eastern time on Friday, down a notch from last week’s close of 1.876 percent, and further off its high of 1.886 percent earlier in the week. Despite the fact that the Fed now appears fairly likely to raise interest rates in December, even if partly just to help salvage its damaged credibility, the increasingly dovish outlook for projected future rate hikes has helped to prop up gold and depress the U.S. dollar in the aftermath of Wednesday’s FOMC statement.
The BoJ rebooted its monetary policy framework on Wednesday, amid skepticism over whether it will be enough to spur inflation. Also, Fed Chair Janet Yellen said the case for a rate hike has strengthened.
Markets rallied earlier this week after the Fed and the Bank of Japan both chose to keep key interest rates at the ultralow levels that have fueled a multi-year stock market boom.
In currencies, the WSJ Dollar Index, which measures the dollar against a basket of 16 currencies, was recently down 0.3%, after falling 0.7% on Wednesday following the Fed’s decision not to raise interest rates.
Separately, US existing home sales fell 0.9% to an annual rate of 5.33 million units in August, the National Association of Realtors said, compared to forecasts for a 1.1% increase.
The Japanese yen and U.S. dollar settled on Friday after a bumpy week driven by sharper monetary policy signals from the Bank of Japan and Federal Reserve. The dollar has fallen roughly 17% against the yen this year.
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PULLED A RABBIT: Open source software company Red Hat rose $2.70, or 3.5 percent, to $79.74 after the company reported better than expected results in its second quarter.
