World stocks rise after BOJ acts on economy

BANGKOK (AP) -- World stock markets rose Thursday and the dollar jumped against the yen after the Bank of Japan said it would massively expand the money supply to create inflation and lift the country out of its long economic malaise.

At the end of a two-day meeting, the central bank said it would double the money supply through purchases of government bonds and other measures. The announcement pulled Japan's Nikkei 225 stock index out of the red. It soared 2.2 percent to close at 12,634.54. The dollar rose sharply, to 95.40 yen from 92.84 yen late Wednesday in New York.

It was the first Bank of Japan policy meeting under its new governor, Haruhiko Kuroda, who has vowed to do whatever necessary to break Japan's economy out of a deflationary slump. Falling prices have crippled growth in the world's No. 3 economy for the past two decades.

European stocks were mostly higher in early trading. While Britain's FTSE 100 fell 0.2 percent to 6,406.74, Germany's DAX rose 0.2 percent to 7,892.27 and France's CAC-40 advanced 0.5 percent to 3,775.33.

Wall Street appeared headed for a higher open, with Dow Jones industrial futures rising 0.4 percent to 14,544 and S&P 500 futures gaining 0.5 percent to 1,555.80.

South Korea's Kospi dropped 1.2 percent to 1,959.45 as bellicose rhetoric between North Korea and the U.S. rattled the local market. Early Thursday, North Korea warned that its military has been cleared to attack the U.S. though experts say the North has not demonstrated that it has missiles capable of long range or accuracy. Washington said it was working to defuse the situation.

Stan Shamu of IG Markets in Melbourne said weaker U.S. service industry growth and hiring figures released Wednesday weighed more heavily on regional stock markets than the fracas brewing in the Korean Peninsula.

"Unless it escalates, I don't think it has too much of an impact," Shamu said. "We'll have to see how the situation develops."

Australia's resource-heavy S&P/ASX 200 lost 0.9 percent to 4,913.50, hurt by drops in commodities prices. Hong Kong and mainland Chinese markets were closed for a public holiday.

Among individual stocks, trading of shares in Australia's Billabong was suspended indefinitely as the troubled swim retailer continues takeover talks with two potential suitors. South Korea's Hyundai Motor Co. declined 5.1 percent.

Benchmark oil for May delivery up 3 cents to $94.48 per barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $2.74, or 2.8 percent, to close at $94.45 a barrel on the Nymex on Wednesday.

In currencies, the euro fell to $1.2800 from $1.2847 late Wednesday in New York.

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