Disappointment that the Bank of Japan did not unveil more measures to boost the economy as well as uncertainty over the course of U.S. monetary policy weighed hard on global markets Tuesday.
There had been expectations that the Bank of Japan, which started a big monetary stimulus this year to get the world's number 3 economy out of a two-decade stagnation, would announce new measures to ease volatility in the Japanese bond market. Instead the bank's policy board merely upgraded its economic assessment.
The disappointment was enough to send Japan's Nikkei stock index down 1.5 percent to close at 13,317.62. However, the retreat was modest in light of the previous day's 4.9 percent advance following an upward revision of first-quarter economic data. In tandem with the fall in equities, the yen made big gains _ the dollar was down 2 percent to 96.87 yen.
"The decision to hold steady prompted a sharp jump in the yen, and is also one factor contributing to weakness in global equities," said Nick Bennenbroek, head of currency strategy at Wells Fargo Bank. Continue reading "Japanese disappointment weighs on global markets"