Share Markets Surge as Bank of Japan Halts Rate Hikes

European and Asian share markets experienced a rise, driven by the Bank of Japan's unexpected decision to halt rate hikes amidst market volatility. The Nikkei rose 1.2%, while the Stoxx 600 index in Europe grew by 0.8%. The decision also affected currency values and bond yields, with the dollar rising against the yen.

European and Asian share markets surged on Wednesday, propelled by a surprising decision from the Bank of Japan to hold off on rate hikes amidst ongoing market volatility. This led to a significant rise in the Nikkei, which climbed 1.2%, continuing its rebound from a recent slump. Similarly, Europe's broad Stoxx 600 index rose 0.8% in the early trading hours.

The move also had a ripple effect on currency markets. The dollar jumped 1.8% against the yen, distancing itself from Monday's low, although it remains below its peak from July. Investors have had to recalibrate their strategies, particularly those with carry trades involving the yen. Meanwhile, banking stocks in Europe experienced a gain, with the sector rising by 1.6%. However, Novo Nordisk reported weaker-than-expected second-quarter profits, leading to a 3.3% fall in its stock.

Bond yields also saw an upward movement. U.S. 10-year yields rose by 5 basis points to 3.935%, well above Monday's low, while the yield on the German 10-year Bund increased by 9 basis points to 2.275%. Safe-haven assets like gold saw marginal gains, while oil prices continued to be volatile due to conflicting signals about global demand and supply disruptions in the Middle East.

(With inputs from agencies.)