* U.S. stocks up in early trading
* BOJ targets long-term yields
* Oil prices jump after EIA data
(Updates with early U.S. market activity, changes dateline,
By Caroline Valetkevitch
NEW YORK, Sept 21 Global stock indexes rose and
the dollar fell to its lowest against the yen in nearly a month
on Wednesday after the Bank of Japan overhauled its monetary
policy to target interest rates and ahead of a Federal Reserve
decision later in the day.
With the global economy showing few signs of rebounding and
investors fretting about the limits of monetary easing by major
central banks, the BOJ's move came mostly as a welcome relief
The BOJ maintained its 0.1 percent negative interest rate,
but abandoned its base money target. Instead, it set a "yield
curve control" under which it will buy long-term government
bonds to keep 10-year bond yields around their current zero
The Fed will announce its policy decision at 2 p.m. EST
(1800 GMT). Expectations of a rate increase have all but
evaporated, but investors will comb the U.S. central bank's
statement for clues about whether it will hike in coming months.
"The BOJ made some dovish comments and that has given
investors an early push on the likelihood of no action from the
Fed," said Andre Bakhos, managing director at Janlyn Capital in
Bernardsville, New Jersey.
The Fed raised rates for the first time in nearly a decade
in December but weak economic data and global uncertainty have
prevented further rate increases.
Oil prices jumped and the S&P energy index rose 1.2
percent, leading gains in the S&P 500.
The Dow Jones industrial average was up 56.67 points,
or 0.31 percent, to 18,186.63, the S&P 500 gained 7.96
points, or 0.37 percent, to 2,147.72 and the Nasdaq Composite
added 19.90 points, or 0.38 percent, to 5,261.25.
MSCI's all-country world stock index was up
0.7 percent, while Europe's STOXX 600 rose 0.5 percent,
helped by euro zone banking shares.
The dollar fell more than 1 percent against the yen to
100.56 yen in early North American trading, its lowest
since Aug. 26.
In the bond market, U.S. Treasury yields rose ahead of the
Fed decision. The yields initially climbed on selling in bond
markets worldwide following the BOJ policy reboot.
"If the Fed doesn't move today ... the market will shift its
focus to December. December is their last chance to move this
year," said Brian Edmonds, head of rates trading at Cantor
Fitzgerald in New York.
In commodities, oil prices extended gains after data showed
U.S. crude stocks fell sharply last week.
U.S. crude futures jumped 2.5 percent to $45.12 a
barrel, while Brent crude futures were up 1.8 percent at
(Additional reporting by Richard Leong in New York, Yashaswini
Swamynathan in Bengaluru, Vikram Subhedar and Jamie McGeever in
London,; Editing by Larry King and Meredith Mazzilli)