Asia Pacific share market had a reason to cheer as it advanced on Friday, 29 January 2016, as investor sentiment was bolstered by the US shares closing higher overnight and the Bank of Japan’s latest economic stimulus measure. Japan’s central bank introduced negative interest rates to spark inflation.
Wall Street closed higher overnight, buoyed by the rise in crude oil on speculation that Saudi Arabia and other OPEC countries would cut output to boost prices. The Dow Jones industrial average was up 107.14 points, or 0.67%, at 16,051.60, the S&P 500 was up 14.73 points, or 0.78%, at 1,897.68 and the Nasdaq Composite index was up 35.56 points, or 0.80%, at 4,503.73.
The Japan’s central bank introduced a negative rate interest policy to boost the economy after previous stimulus efforts produced indifferent results. The Bank of Japan will cut interest rates further to -0.1% to decrease commercial banks borrowing costs in an attempt to boost Japan’s flagging economy. The Bank of Japan’s rate move comes after the European Central Bank indicated it could boost stimulus as soon as March
The BOJ also pledged to keep increasing the monetary base at an annual pace of 80 trillion yen ($663 billion), primarily by continuing to purchase Japanese government bonds, exchange-traded funds and real-estate investment trusts.