US pre-open: Markets set to surge after Bank of Japan announcement

US markets were set to surge on Friday as investors cheered the Bank of Japan’s latest policy announcement.

The Dow Jones Industrial Average was set to open up 141 points, while the S&P 500 and the Nasdaq were expected to start the session 17 and 29 points higher respectively.

US GDP data for the last three months of 2015 will be out at 1330 GMT as well as the employment cost index.

The Chigaco Purchasing Managers' survey for January will be released at 1445 GMT, and the University of Michigan confidence survey is due at 1500 GMT.

Japan's big surprise boosts Asian markets

The Bank of Japan's big Friday surprise had investors in Tokyo in a frenzy as they tried to make sense of the new negative interest rate policy.

Japan's central bank policy was a surprise to investors who were previously cautious that an extension of the controversial easing policy might be on its way.

Instead, they were met with the news that the official interest rate would be cut from the previous 0.1% to -0.1%.

The rate is what the Bank of Japan pays on cash being deposited there in excess of the legally required minimum reserves.

Officials said the negative rates were brought in to "pre-empt the manifestation of risk and to maintain momentum to achieve the price stability target of 2%".

"We will cut the interest rate further into negative territory if judged as necessary", the bank continued in a statement released after their two-day policy camp.

The Japanese domestic economy had been suffering the effects of extremely low inflation, a slow-to-start domestic economy and volatile global markets.

Yet the move "caught a lot of people by surprise", according to Aberdeen Asset Management Japanese equities head Kwok Chern-Yeh.

European stocks were in the black on the news from Japan but off earlier highs.

Oil was keeping above $33 a barrel, with West Texas Intermediate up 0.15% to $33.27 a barrel but Brent down 0.21% to $33.82.

The dollar was up against all the major currencies, surging 1.81% against the yen, as well as rising 0.46% against the pound and 0.19% against the euro. Spot gold was down 0.26% to $1,112.45.

In company news, Amazon shares dropped nearly 10% after the online marketplace reported its largest quarterly profit ever, but still fell short of analysts' expectations.

Microsoft shares jumped 5% before the open after it reported second quarter revenue of $23.8bn, above estimates.

Visa shares popped up around 0.6% after the credit card company reported first quarter earnings of $1.7bn late on Thursday. Rival MasterCard is due to post its results on Friday before the markets open.