Bank of Japan surprise pushes yen up and Asian stocks down

Sydney — The yen surged and Asian shares fell sharply on Tuesday after the Bank of Japan’s decision to allow long-term interest rates to rise more, a move analysts said could signal a step towards changing Japan’s long-held yield curve control.Japan’s Nikkei Stock index shed 2.2% after trading in positive territory earlier in the day, as stocks resumed trading after the BOJ decision.

“The move came earlier than I had expected but a step towards the normalisation process of policy in Japan,” Kerry Craig, JPMorgan Asset Management’s global markets strategist, told Reuters. In early European futures trading, the pan-region Euro Stoxx 50 futures were down 0.89% at 3,784, German DAX futures were down 0.91% at 13,888, FTSE futures were down 0.63% at 7,321. US stock futures, the S&P 500 e-minis, were down 0.52% at 3,825.5.

Australia's Reserve Bank considered leaving interest rates on hold at its December 6 policy meeting, according to minutes published on Tuesday, but delivered a 25 basis point hike.

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