Global equity markets surged more than 1 percent and the yen fell to a nearly seven-year low against the dollar after the Bank of Japan surprised financial markets by ramping up its massive economic stimulus program, Reuters reported.
The stronger dollar also pushed Brent crude to notch its steepest monthly decline, about 9 percent, since May 2012 as the oil benchmark traded below $85 a barrel for much of the session.
Equity markets surged as the BOJ decision to buy more assets helped ease concerns about the end of the US Federal Reserve’s stimulus program and the European Central Bank’s reluctance thus far to engage in large-scale bond-buying.
“It’s not just the (BOJ’s) easing, but the asset allocation from the pension plan is of course also helpful,” said Paul Zemsky, chief investment officer of multi-asset strategies and solutions at Voya Investment Management in New York.
“Economic growth (in the United States) is looking pretty good, earnings are good ... we will end the year certainly closer to 2,100 than 2,000 on the S&P 500.”
MSCI’s all-country world equity index .MIWD00000PUS rose 1.1 percent, while the FTSEurofirst 300 index of top European shares gained 1.84 percent, to close at 1,351.96. In Tokyo, the Nikkei stock index soared 4.8 percent.
On Wall Street, both the Dow Jones industrial average and the S&P 500 index posted record closing highs, while the Dow also hit a record intraday high. In a late-day surge the S&P hit a peak just 1.08 points away from setting a new intraday high.
The Dow Jones industrial average closed up 195.1 points, or 1.13 percent, to 17,390.52. The S&P 500 gained 23.4 points, or 1.17 percent, to 2,018.05 and the Nasdaq Composite rose 64.60 points, or 1.41 percent, to 4,630.74.
The dollar climbed as far as 112.47 yen, its highest since December 2007, for its best day since April 2013. The greenback pared some gains but still rose 2.87 percent to 112.33 yen.
The euro jumped to a six-week high against the yen of 140.70 yen and fell 0.67 percent to $1.2528 against the dollar.
The dollar index .DXY, a measure of the greenback against six major currencies, rose 0.86 percent to 86.886.
US Treasury debt prices fell as investors moved away from safe-haven bonds and grew more optimistic about prospects for the world’s largest economy.
Brent for December LCOc1 fell 38 cents to settle at $85.86 a barrel. US crude CLc1 settled down 58 cents at $80.54.
Spot gold slid as much as 3 percent to its lowest since July 2010 at $1,161.25 an ounce in early trade. US COMEX gold futures GCZ4 settled down 2.25 percent at $1,171.6.
