This map shows all the central banks with negative interest rates

Trillions of yen in commercial banks’ deposits with the BoJ will not be affected by the rate cut.

Some have characterised the ECB’s and the BOJ’s lurch into negative territory as “currency warfare” By keeping their currencies “cheap as chips” its felt Europe and Japan are gaining an unfair advantage, particularly in the Global Export markets.

On Friday, the bank said it had not ruled out a further cut.

Both the loonie’s low value and Japan’s low inflation rate are symptoms of the decline in global oil prices, caused by an oversupply, low economic growth and the relatively strong value of the USA dollar against other currencies.

Its decision follows a raft of economic data released by the government on Friday morning that missed market expectations, sparking concerns for the outlook of the world’s third-largest economy.

“The BoJ decision will have a lasting negative impact on yen because speculative positioning was the wrong way”, Sean Callow, a Sydney-based foreign-exchange strategist at Westpac Banking, told Bloomberg News. He said data would be key this week, in particular purchasing managers’ index (PMI) surveys and US labour market data on Friday. “That triggered European investors to push the “risk-on” button”.

The central bank announced Friday that it would begin charging lenders for some of the extra cash they keep at the BOJ.

The pan-European FTSEurofirst 300 .FTEU3 index closed 2.27 percent higher at 1,348.08.

United States stocks surged into the close. The CBOE Volatility index.VIX, often called Wall Street’s fear index, fell 12 percent to close below 20 for the first time since January 6.

The Dow Jones industrial average rose 295.13 points, or 1.84 percent, to 16,364.77. The S&P 500 gained 46.88 points, or 2.48%, to 1,940.24 and the Nasdaq Composite rose 107.28 points, or 2.38%, to 4,613.95.

Two-year German bond yields touched a record low of minus 0.471 percent.

“We expect the European Central Bank to trim its discount rate by a further 10 basis points to minus 0.4 percent at its March meeting, and believe it could very well step up its monthly purchase of assets”, he wrote. “The announcement opens the door to sustain further easing by the BOJ throughout the year”.

Benchmark 10-year notes were last up 15/32 in price, pushing their yield down to 1.9313 per cent after earlier sliding to 1.91 per cent, the lowest since October 2.

In late NY trading, the euro fell to $1.0829 from $1.0958 in the previous session, while the dollar bought 121.17 Japanese yen, higher than 118.78 yen of the previous session.