US pre-open: Stocks seen lower after BoJ disappoints

US futures pointed to a weaker open on Wall Street after the Bank of Japan surprised markets by choosing not to implement further stimulus measures.

At 1045 BST, Dow Jones Industrial Average and S&P 500 futures were down 0.8%, while Nasdaq futures were 0.6% lower.

“US markets look set for a sharply lower open after a fairly neutral Federal Reserve meeting has proven not enough to counterbalance disappointment at the inaction from the Bank of Japan,” said Jasper Lawler, market analyst at CMC Markets.

Earlier on Thursday, the Bank of Japan left its policy rate at -0.1%, but did not extend its stimulus package to include negative rate bank loans, which many had been expecting.

The BoJ’s decision followed on from the Federal Reserve’s announcement on Wednesday, which saw the central bank stand pat on interest rates, keeping the federal-funds rate at between 0.25% and 0.50%, as widely expected, but leaving the door open to a June hike.

“Further monetary easing from central banks was part of what was being baked into the rally. Central banks aren’t looking quite as helpful as they were a day ago; the Fed have kept the door from shutting on a June rate hike and the Bank of Japan have shied away from offering negative rates on bank loans,” said Lawler.

In corporate news, Facebook surged 8% in pre-market trade after its first-quarter results out late on Wednesday beat expectations. The social network posted earnings of $1.51bn, p from $512m in the same quarter a year before.

On the downside, solar panel maker First Solar was under the cosh as its quarterly results missed analysts’ expectations.

Dow Chemical, ConocoPhillips, Valeant Pharmaceuticals and Time Warner Cable were among the companies slated to report earnings before the opening bell.

Oil prices edged up in choppy trade on Thursday, with West Texas Intermediate up 0.4% to $45.52 a barrel and Brent crude 0.6% higher at $47.48.

The dollar was 0.3% weaker against the pound and the euro and 3% lower versus the yen, which surged after the BoJ announcement.

“The raging appreciation of the JPY last night bears testament to the size of the disappointment wielded on the market by the BoJ’s decision to leave policy unchanged,” said Rabobank.

On the economic calendar, initial jobless claims are at 1330 BST, along with the first release of first-quarter US GDP.