The yen rose more than half a percent against the dollar on Tuesday, helped by an oil price weakening which sent investors in search of traditional safe havens and by a neutral message from the Bank of Japan on rates.
European shares fell on Tuesday, pulled lower by mirroring declines in Asia after the Bank of Japan painted a bleaker picture of the Japanese economy and helped push the yen higher, and as oil and metals prices dropped.
Currency markets were off to a relatively quiet start on Monday, stabilizing after last week's wild swings, as investors geared up for Japanese and U.S. central bank policy meetings that could offer them fresh direction.
European shares followed Asian stocks higher on Monday, adding to gains chalked up after last week's stimulus package from the European Central Bank, while oil prices fell as Iran dashed prospects of a quick deal to freeze output.
As everyone expected, the European Central Bank’s (ECB) monetary policy meeting was the marquee market event of last week, even if the market’s interpretation of its meaning repeatedly flip-flopped over the last 36 hours of trade.
It didn’t take long for investors to understand that more stimulus than expected following Thursday’s European Central Bank meeting was likely to reset the tone. So much for the recent plunge in oil prices and how it gave global stock markets a bearish tinge to start the year.