A look at the day ahead in European and global markets from

Ankur Banerjee

In a well-telegraphed move, the Bank of Japan delivered what

investors had been waiting for - ending its negative interest

rate policy after eight years. The pivot marks the country's

first rate hike since 2007.

Not just that, the central bank abandoned yield curve

control, a policy in place since 2016 that capped long-term

interest rates around zero, and also said it would no long

purchase risky assets such as exchange-traded funds (ETF) and

Japanese real estate investment trusts.

And just like that, the era of cheap money has come to an

end and its impact across the globe, especially in the murkier

world of FX carry trades remains to be seen.

Several media reports over the past few weeks had indicated

the likelihood of these sweeping moves and that perhaps explains

the initial market reaction. Japanese shares were volatile and

then rose, while the yen slid to 150 per dollar.

BOJ Governor Kazuo Ueda is due to speak at 0630 GMT to

further explain the move and the market will focus on the tone

to gauge whether the last dove in the developed market is ready

to tighten more.

The BOJ though has pledged to maintain accommodative policy

and traders expect rates to remain at zero for some time.

The Reserve Bank of Australia was the other central bank in

focus, after it decided to leave interest rates unchanged on

Tuesday. The decision was expected though the RBA further

watered down its tightening bias, leading the Australian dollar

lower.

That left the Aussie/yen cross, often a good measure of

investor desire for carry trades and global risk appetite in

general, little changed in Asian hours.

European bourses are due to open lower, futures indicate, as

traders await the U.S. Federal Reserve's policy decision on

Wednesday.

The central bank is widely expected to stand pat but the

focus will be on its economic projections and how many rate cuts

it estimates for the year.

Key developments that could influence markets on Tuesday:

Economic events: Wages in euro zone for Q4, euro zone labour

costs for Q4; Germany ZEW economic sentiment for March

(Editing by Jacqueline Wong)