Japanese stock market is up by a whopping 14% after the country’s central bank said the economy is on track for its largest monthly expansion in more than five years.
The benchmark Nikkei 225 index rose 4.5% on Thursday to 16,965.62 points, or about 0.9% of the world’s benchmark.
The Dow Jones industrial average gained 1.2% to 24,903.21.
The S&P 500 index of large companies gained 0.7% to 2,079.13.
The Nasdaq composite gained 0-1.03% to 4,873.53.
The 10-year Treasury yield rose to 2.34% from 2.23% Thursday.
The euro fell 0.3% to $1.1098.
“It’s not an exaggeration to say this is a new era of Japan,” said Kenji Okada, a professor of finance at Keio University.
“There’s a lot of optimism.
It’s just that this has not been reflected in the market itself.”
The yen was weak after the Japanese central bank lifted its benchmark interest rate from a record low of 0.75% to 1.05%.
The Japanese currency traded at $1,239.35.
The U.S. dollar rose to 88.35 yen from 87.40 yen.
Japanese stocks rose sharply as investors sought to capitalize on a new surge in demand for government bonds.
The Nikkein 225 index gained by 7.3%, while the Nikkeis 10-country composite gained 4.4%.
The Sino-Japanese currency pair rose to 6.3%.
Investors are also buying U.K. shares, while German shares are up slightly.
The yen strengthened against the greenback after the Bank of Japan said it is poised to cut interest rates in September and said it will keep a tighter lid on inflation to protect savers.
“The Japanese stock and bond markets are going up, but we’re not seeing a big impact from the bond market,” said Michael Belsky, senior market analyst at S&P Dow Jones Indices.
“You can still buy bonds for as low as $1 a share.
That’s still pretty good, especially when you factor in the $3 billion bond yield,” he said.
A major factor in selling was the Fed’s latest interest rate hike, which the central bank announced on Wednesday, raising the federal funds rate to 0.25%.
The Fed’s target rate for the first time since mid-2015 was already 2.5%, which is slightly below its goal of 3%.
The yen also rose, after the yen was little changed against the U.I.S., the euro and other currencies.
The dollar index rose 1.3 percent to 102.07 yen, its strongest gain since early July.
The yuan added 0.5 percent to 97.57 yuan.
The currency pairs gained for the second straight session.
The British pound was down 0.6 percent to $0.2665.
The Japanese yen weakened 1.1 percent to 99.55 yen, while the euro lost 0.2 percent to €1.1123.
Japanese equities are up 6.2%.
Dow Jones index: The Dow industrials, the S&p 500, the Nasdaq, the Russell 2000, the FTSE 100, the Dow Jones Industrial Average and the S-shaped S&porometer rose 0.8% and 3.3%; the Nasd gained 0% and 2.3%); the Russell 1000 added 0% to 20,929; the FMI shed 0.4% to 8,749; the DAX lost 0%.
The Russell 2000 lost 0%.
S&aparities index: the Semicondata index, the Standard & Poor’s 500 index and the MSCI All-Country World Index all fell 0%.
The Russell 1000 index gained 1%.