STOXX 600 down 0.5
Real estate, automakers weigh
German producer prices ease in Nov
Orange slips as finance head plans to leaves

Dec 20 Reuters European shares fell on Tuesday, pulled down by real estate stocks, after the Bank of Japan BOJ rattled global markets with a surprise policy shift that would allow longterm interest rates to rise further.

The regionwide STOXX 600 index was down 0.5 by 0914 GMT, but came off a onemonth low hit earlier in the session.

The BOJ decided to allow the 10year bond yield to move 50 basis points either side of its 0 target, wider than the previous 25basispoint band, in a move aimed at easing some of the costs of prolonged monetary stimulus.

The policy tweak was widely seen as the beginning of a potential end to Japan39;s ultraloose monetary policy and comes just as hawkish messages from other major central banks last week doused hopes of an end to monetary policy tightening any time soon.

It39;s a very minor policy adjustment. It39;s just that it39;s the first from the Bank of Japan from a very long time, perhaps acknowledging that some of the inflation that they39;re seeing, they will potentially need to react to in the future, said Gerry Fowler, head of European equity strategy at UBS.

It39;s a moment where the market is realizing the direction of travel even for the Japanese central bank is to potentially see yields move higher at least in a precautionary way in case they need to deal with persistent inflationary pressures….