Britain's FTSE 100 rose 1.2 percent to 6,004.94 and France's CAC 40 advanced 1.4 percent to 4,382.73. Germany's DAX climbed 1.3 percent to 9,763.69. Futures indicated that Wall Street was set to extend gains. Dow futures added 1 percent and S&P 500 futures climbed 1.1 percent.
The Bank of Japan said it is imposing a 0.1 percent fee on some deposits left with the central bank, effectively a negative interest rate. It hopes that will encourage commercial banks to lend more, rather than keeping cash at the BOJ, and stimulate investment and growth.
"Concerns had been mounting that the BOJ were increasingly tapped out in their ability to ease monetary policy," Angus Nicholson, a market analyst at IG in Melbourne, Australia, said in a commentary. "The announcement opens the door to sustain further easing by the BOJ throughout the year."
After gyrating between losses and gains, Japan's Nikkei 225 finished up 2.8 per cent at 17,518.30. The policy decision is a possible boost for the economy but viewed by investors as negative for banks.
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Australia's S&P/ASX 200 added 0.6 per cent to 5,005.50 while South Korea's Kospi closed up 0.3 percent at 1,912.06. Stocks rose in Taiwan, India and Southeast Asia.
The Kremlin said yesterday it is actively discussing the instability of oil markets with the world's key producers.
Even though Russia said there was no concrete plan for a coordinated cut in production, it was enough to push the price of oil higher. Investors hope that talks could lead to production cuts that would begin to alleviate a global supply glut.
The dollar jumped to 120.85 yen from 118.84 yen the previous day. The euro weakened to USD 1.0911 from USD 1.0932 but against the Japanese currency rose to 131.87 yen from 129.92 yen.