LONDON - Global stocks neared one-month highs on Tuesday, after the Bank of Japan left monetary policy unchanged, bolstering the yen and Japanese stocks.

The MSCI All-World index was up 0.2 percent, near one-month highs, thanks in part to a 3 percent rebound in Hong Kong stocks that slumped the previous day, when foreign outflows gathered pace and short selling surged.

Elsewhere, investors have been encouraged by the prospect of falling interest rates in other major economies, including the United States, the eurozone and Britain, which have seen the benchmark US S&P 500 officially enter a bull market and Germany's DAX trade within sight of late 2023's all-time peaks.

Ultra-loose BOJ

Meanwhile, the BOJ kept interest rates in negative territory, but signaled its growing conviction that conditions for phasing out its ultra-loose monetary policy were falling into place, which gave the yen a lift and sent Tokyo's Nikkei to fresh 34-year highs.

The yen headed towards its biggest one-day gain in a month, pushing the dollar down by as much as 0.75 percent to a session low of 146.99.

"For our mind, April is the absolute earliest that they will contemplate a tightening... We actually think the risk is that they end up moving later rather than sooner than April," Ray Attrill, head of FX research at National Australia Bank, said.

Monday's rally on Wall Street that took the S&P 500 to a second consecutive record close did not translate into a rise in European stocks, where the regional STOXX 600 index fell 0.2 percent, led by declines in pharma and semiconductor stocks.

Investors are waiting for earnings from Netflix later and expectations are generally upbeat. Also due is GE.

In currencies, the euro edged up 0.2 percent against the dollar to $1.0906. The European Central Bank (ECB) meets on Thursday and is expected to hold monetary policy steady. Sterling was up 0.2 percent at $1.274. The Bank of England meets next week to set interest rates.

US Treasury yields edged up as investors took profit from Monday's modest price increase. The yield on the 10-year note was up 3 basis points at 4.122 percent, while the two-year note traded at 4.395 percent, up 2 bps.

Oil prices were mostly steady on Tuesday after surging 2 percent overnight as a Ukrainian drone strike on Russia's Novatek fuel terminal caused supply disruptions.

Brent crude futures were last up 0.4 percent at $80.34 a barrel.