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Wall Street Breakfast: BOJ Roils Markets By Not Expanding Stimulus

The Nikkei has slumped and the yen has jumped after the Bank of Japan surprisingly held off from increasing its already massive monetary stimulus as it looks to take more time to understand the effect of its negative interest rates. The BOJ also put back to 2017 its timeframe for achieving its target of 2% inflation, the fourth delay in about a year. The BOJ's lack of action came despite the strengthening of the yen this year and inflation not picking up - data today showed that March CPI fell 0.1% on year vs +0.3% in February.

In addition to sending Japanese shares lower, the Bank of Japan's lack of new action seems to have sent world stocks tumbling as well. Following a hawkish/dovish wash of an FOMC statement yesterday after the Fed held interest rates at 0.25-0.5%, markets are now eyeing U.S. Q1 GDP data, which is due out this morning. Economic growth is estimated to have slipped to 0.7% from 0.9% previously.

As expected, Germany's unemployment rate has remained unchanged at an all-time low of 6.2% in April. The number of unemployed people declined for the seventh consecutive month with a drop of 16,000 on month vs forecasts for a gain of 4,000.

Facebook shares jumped 9% premarket after its Q1 earnings easily topped expectations, with adjusted EPS of $0.77 and sales soaring 52% to $5.38B, while net profit nearly tripled to $1.51B from $512M. Ad revenue leapt 57% to $5.2B, four-fifths of which was from the more lucrative mobile ads. Facebook also plans to create a new class of nonvoting shares that will further strengthen Mark Zuckerberg's control of the company.

French pharmaceuticals group Sanofi has offered to acquire U.S. biotech company Medivation...