Japan Leads World Stocks Lower

HONG KONG (AP) -- Japanese stocks tumbled and the yen surged Thursday after the central bank dashed investors' hopes for more stimulus, leading declines in most other world benchmarks after the Fed left interest rates unchanged.

KEEPING SCORE: European stocks slid in early trading, with France's CAC 40 down 1.6 percent to 4,487.10 and Germany's DAX shedding 1.6 percent to 10,137.11. Britain's FTSE 100 dropped nearly 1 percent to 6,260.02. U.S. stocks were poised to open lower, with Dow futures falling 0.8 percent to 17,823.00 and broader S&P 500 futures also down 0.8 percent at 2,074.70.

JAPAN POLICY: Investors were disappointed by the Bank of Japan's decision not to add to its huge economic stimulus program, though it did give some extra relief for earthquake recovery programs. Hopes for more stimulus for Asia's No. 2 economy rose after the latest official figures revealed weak inflation and consumer spending for March even as factory output climbed.

MARKET INSIGHT: "This shows that too much expectation of further easing had been priced in and the BOJ has surprised the market by taking no action," Margaret Yang, an analyst at CMC Markets in Singapore, said in a commentary. "It is probable that the central bank is temporarily running out of tools to stimulate the economy, or they need more time to observe and assess the impact of negative interest rates."

FED ON HOLD: Earlier, the U.S. central bank offered few surprises for investors in its latest policy statement, saying it would keep a key interest rate unchanged while revealing no clues as to when its next rate hike might occur. The Fed said that the United States is seeing solid job gains while noting economic activity appears to be slowing and expressed less alarm about the global economy than it had at its previous meeting in March.

ASIAN SCORECARD: Japan's benchmark Nikkei 225 index erased earlier gains, falling 3.6 percent to 16,666.05. South Korea's Kospi shed 0.7 percent to 2,000.93 while Hong Kong's Hang Seng index eked out a 0.1 percent gain to 21,388.03. The Shanghai Composite Index in mainland China lost 0.3 percent to 2,945.59 and Australia's S&P/ASX 200 added 0.7 percent to 5,225.40. New Zealand's benchmark rose but those in Taiwan and Southeast Asia fell.

CURRENCIES: The dollar fell 3 percent against the yen after the central bank statement, sliding to 108.18 yen from 111.53 yen. The euro strengthened to $1.1355 from $1.1325.

ENERGY: Benchmark U.S. crude oil fell hovered at its highest level this year, rising 3 cents to $45.36 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.29, or 2.9 percent, to settle at $45.33 a barrel on Wednesday, which was its highest price since December. Brent crude, the international standard, lost 13 cents to $47.05 a barrel in London.

(KA)