Nikkei slides back as BoJ opts against further action

Japanese equities gave up nearly 200 points overnight as the Bank of Japan (BoJ) disappointed the market by opting to keep its monetary policy unchanged, failing to address concerns over bond market volatility.

Having leapt 5% yesterday on improved GDP figures, the Nikkei shed 1.5% this morning to close at 13,317 after the central bank announced its decision. The BoJ's April announcement of an ambitious asset purchase programme was accompanied by heightened volatility in the Japanese bond market, with yields on benchmark debt spiking from 0.3% to 1% before settling around their current level of 0.9%. The bond market sell-off has pushed up mortgage rates and analysts' fear borrowing costs could be next to be impacted, subsequently stunting economic growth. Some BoJ members had considered s...