European shares rose on Wednesday, buoyed by a rally in banks, after a policy overhaul at the Bank of Japan lifted risky assets globally.
The STOXX 600 index rose 0.8 per cent, touching its highest level in 2 weeks after a rise in European banks.
Eurzone zone banks were up 2.4 per cent, on track for their best day in one month with Natixis, Italian and Spanish lenders among the top risers.
Europe took its cue from Asian markets which welcomed the Bank of Japan’s decision to adopt a target for long-term interest rates. Investors also awaited the U.S. Federal Reserve’s decision on interest rates, which were expected to be left unchanged.
“Today’s policy decision is marginally positive for bank stocks and other risk assets for the short-term as the bank refrained from cutting the short-term rate to a further negative level, but the sustainability of the risk asset rally is questionable. The BOJ’s policy exhaustion is increasingly clear,” Tomoya Masanao, Head of Portfolio Management Japan at PIMCO, said in a note.
