By Carla Mozee, MarketWatch
Stocks across Europe bounded higher Wednesday, bolstered by rises in financial shares after the Bank of Japan tweaked
monetary policy in a way that should help yield-dependent businesses.
The Stoxx Europe 600 gained 0.4% to 342.46, closing at its highest level in nearly two weeks.
The bank is targeting a steeper yield curve, meaning yields on longer-dated bonds, such as the 10-year, are higher
than shorter-dated bonds.
Read:Here's why the Bank of Japan is putting its focus on the yield curve (http://www.marketwatch.com/story/heres-why-
"Anchoring the 10-year yield at 0% has two effects. First off, they're guaranteeing that if the banks (or anyone else)
buy 10-year bonds at this level, they won't lose money," said Marshall Gittler, head of investment research at FXPrimus,
in a note.
"Secondly, by preventing 10-year yields from going below zero, the yields of longer-term bonds should stay positive.
That will help the profitability of insurance companies and pension funds, which need longer-term assets to match their
long-term liabilities," he said.
The Stoxx Europe 600 Bank Index popped up 2% for its largest gain in nearly a month. Spain's Banco Popular
Español (POP.MC) jumped 9.1%, France's Société Générale SA (GLE.FR) bulked up 1.9%, and
Germany's Commerzbank AG (CBK.XE) rose 3.3%. Italy's UniCredit SpA (UCG.MI) added 3.6%.
Among insurers, AXA SA (AXAHY) moved up 2.7% and Allianz SE (ALV.XE) put on 1.2%.
The Bank of Japan's move swings the spotlight on the European Central Bank, which this month left monetary policy
Fed ahead: Investors have another key central bank meeting to grapple with later Wednesday. The U.S.Federal Reserve's
decision on whether to raise interest rates is due at 7 p.m.London time, or 2 p.m. Eastern Time.
Read:Here's how the Fed's doves and hawks will use the new inflation and sales data (http://www.marketwatch.com/story/
Indexes: Italy's FTSE MIB leapt 0.9% to 16,349.82. In Frankfurt, the DAX 30 rose 0.4% to 10,436.49.
Spain's IBEX 35 climbed 0.8% to 8,758.50. Banco Santander SA (SAN) (SAN) was up 3.2% following reports that the
Spanish lender walked away from talks to buy Royal Bank of Scotland PLC's (RBS.LN) (RBS.LN) Williams & Glyn branches.
RBS shares fell 0.3%.
The U.K.'sFTSE 100 advanced 0.1% to 6,834.77. In Paris, the CAC 40 closed 0.5% higher at 4,409.55.
Euro: The euro was trading at $1.1167, close to late Tuesday's level around $1.1158. Against the yen, the shared
currency was buying Yen112.39, compared with Yen113.43 late Tuesday.
Read:Global yields rise after BOJ surprises with 10-year rate target (http://www.marketwatch.com/story/global-yields-
(END) Dow Jones Newswires
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