BoJ modifies policy framework- keeps rates unchanged

Global markets were keenly eyeing the policy stance to be taken by both Bank of Japan (BoJ) and the US Fed. Even as FIIs are believed to be taking cover just in case if there is US Fed rate hike, the consensus amongst economists on BoJ policy decision was that the rates may be eased further.

However, BoJ surprised stakeholders and kept the policy rates unchanged at -0.1 per cent. BoJ announced that it will increase the monetary base by 80 trillion yen a year. Markets have reacted positively to this particular announcement with Nikkei trading up by 1.07 per cent on intraday basis on Wednesday.

The news, sentiment wise, is dampening to global equities and hence Indian markets have shown a tepid response to the BoJ announcement. Commodities prices, however, reacted negatively to the announcement as prices fell immediately on the BoJ announcement. Asian markets had a mixed reaction to the BoJ announcement.

Now, with BoJ announcement already factored in by the markets, eyes are on the US fed decision.

Sensex is trading at 28603 levels, up by 78 points, while Nifty is trading at 8802 points, up by 26 points on intraday basis.