Global shares rise, dollar drops vs yen after BOJ hint of exit from negative rates

LONDON, Sept 11 (Reuters): Global shares edged up on Monday thanks in part to a burst of risk appetite, with the yen jumping by the most against the dollar in two months after the head of the Bank of Japan hinted at an eventual shift away from negative interest rates.
Signs of stabilisation in the Chinese economy pushed up the price of copper and underpinned the oil price above the crucial $90-a-barrel level.
The yen surged after BOJ Governor Kazuo Ueda said the central bank could end its policy of negative interest rates when the achievement of its 2 per cent inflation target is in sight.
The dollar dropped by as much as 1.3 per cent to 145.91 yen but is still within sight of last week's high of 147.87 - a level at which traders were preparing for the BOJ to possibly intervene outright in the markets to prop up the currency.
The dollar has benefited in recent weeks from a growing sense of caution among investors towards China and Europe, both showing worrying signs of slowdown in contrast with the US economy, which many believe is heading for a soft landing.
Global shares, as reflected by the MSCI All-World index, rose 0.2 per cent, supported by a bounce in stocks in Europe, where the STOXX 600 gained 0.5 per cent. Last week, the STOXX posted its longest stretch of losses in 5-1/2 years.
This week holds a number of major risk events, such as the European Central Bank policy meeting and a key reading of US monthly inflation, which will likely temper a broader rally, according to City Index strategist Fiona Cincotta.
"After such a heavy sell-off last week, there is a bit of a recovery, or a pause in the sell-off, now, and given that it's such a big week as far as the ECB is concerned and as far as inflation is concerned, investors are in a cautious mood, which is going to prevent stocks from going too much higher," she said.
US inflation data is due on Wednesday. Economists polled by Reuters expect consumer prices to have risen by 3.6 per cent from last year, up from July's 3.2 per cent reading.
The core rate, which excludes food and energy prices and is more of a focus for the Fed, is expected to have slowed to an annual rate of 4.3 per cent from 4.7 per cent in July.
Investors are pricing in a 93 per cent probability the Fed will leave rates unchanged when it convenes next week, but the outcome of the November meeting is less clear - money markets show the split is 50/50 as to whether there is another hike or not.