The Bank of Japan's shock announcement that it would charge banks to hold their cash sent Asian markets surging and the yen tumbling Friday as investors ended a highly volatile month with a bang.
Trading floors across the planet have been awash with red in January as investors endured one of the worst starts to a year in recent history, hit by China's economic crisis, weak global growth and crashing oil prices.
However, some stability seemed to be established over the past week on hopes that the Bank of Japan and European Central Bank will provide some support.
And on Friday, Japanese bank policy makers stepped up, unveiling a new weapon in their long-running fight against anaemic economic growth and deflation.
After a two-day meeting the bank's policy committee said it would adopt a negative interest rate policy, meaning banks pay to park their cash in the BoJ. The move aims to give banks an incentive to boost lending, which in turn should help fuel economic growth.
A similar policy was adopted by the European Central Bank in 2014, the first time by a major central bank.
"It's a surprise," Hideaki Kuriki, a bond investor in Tokyo at Sumitomo Mitsui Trust Asset Management, told Bloomberg News. "They think the ECB policy is successful so they're taking the same policy."
However, some were less effusive, with Norihiro Fujito, general manager of Mitsubishi UFJ Morgan Stanley Securities, saying the bank was "pointlessly confusing the market", adding it was "symbolic of the limits of the BoJ's policies".
Still, the news sent Japan's Nikkei stock index soaring more than three percent at one point before paring the gains slightly to end 2.8 percent higher. And the greenback jumped to 120.70 yen in the afternoon, up from 118.60 yen before the announcement.
- 'Tough year' ahead -
"The decision... suggests that the yen will weaken further against the dollar in coming months," Marcel Thieliant, senior Japan economist at Capital Economics, said in a note, adding that his firm saw the dollar rising to 130 yen by the end of 2016 and to 140 yen by the end of next year.
Among other markets, Hong Kong was up 2.3 percent in the afternoon, Shanghai surged more than three percent and Sydney ended 0.6 percent higher. Singapore and Manila also gained almost two percent and Taipei added 2.2 percent.
Until the rally in Shanghai, the index had endured its worst month since 1994 as dealers fret over the state of the Chinese economy and authorities' ability to handle the crisis.
And analysts warned of further problems ahead, with oil prices stuck near 12-year lows and confidence still at a premium.
"After the big sell-down we've seen in the early part of January, we're seeing a bit of stabilisation," Matthew Sherwood, head of investment strategy at Perpetual Ltd in Sydney, told Bloomberg News.
"Is this the calm before the next storm or is this a real opportunity to come in and start buying cheaper assets? I still think we're in for a very tough year."
Oil prices edged up again, boosted by hopes for talks between the OPEC producers' group, which is responsible for about 40 percent of global output, and Russia to end a supply glut.
US benchmark West Texas Intermediate was 2.1 percent higher and Brent added 2.4 percent.
The two contracts surged Thursday after Moscow said it could hold meetings with OPEC over possible output cuts that could amount to as much as five percent per country.
However, analysts warned the prices could soon fall back as they are sceptical any deal can be reached, with OPEC intent on keeping market share despite the painful hit from low prices.
The cost of crude has crashed by about three quarters since mid-2014 owing to weak demand, overproduction, the supply glut and a global economic slowdown, particularly in key user China.
- Key figures at 0730 GMT -
Tokyo - Nikkei 225: UP 2.8 percent at 17,518.30 (close)
Shanghai - Composite: UP 3.1 percent at 2,737.60 (close)
Hong Kong - Hang Seng: UP 2.2 percent at 19,614.86
Dollar/yen: UP at 120.70 yen from 118.82 yen Thursday
Euro/yen: UP at 131.60 yen from 130.00 yen
Euro/dollar: DOWN at $1.0905 from $1.0941
New York - Dow: UP 0.8 percent at 16,069.94 (close)
London - FTSE 100: DOWN 1.0 percent at 5.931,78 (close)