Asian Stocks Jump as BOJ Adopts Negative Rates, Oil Extends Gain

Asian stocks rose, extending a weekly gain, as Japanese shares jumped in volatile trading after the central bank said it will adopt negative interest rates, and energy companies climbed as oil extended its rebound.

The MSCI Asia Pacific Index increased 1.6 percent to 121.52 as of 5:06 p.m. in Tokyo, taking its weekly gain to 2.5 percent, the first in four weeks. The Topix index jumped, plunged and then jumped again to end 2.9 percent higher after the Bank of Japan sprung another surprise on investors, adopting negative rates to spur banks to lend in the face of a weakening economy. Shares in Shanghai gained 3.1 percent. The regional benchmark gauge is still down 7.9 percent this month on concern about a slowdown in China and a rout in oil and other commodities.

The BOJ’s board was split 5-4 on the decision to set an interest rate of minus 0.1 percent on a portion of the current accounts held by financial institutions at the central bank. The change takes effect on Feb. 16, the central bank said Friday at the conclusion of a two-day policy meeting. The BOJ 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.

Source: Bloomberg