HONG KONG - The Bank of Japan's shock announcement that it would charge banks to hold their cash sent Asian markets surging and the yen tumbling, 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, with markets hit by China's economic crisis, weak global growth and crashing oil prices.

Some stability seemed to be established over the past week, however, on hopes that the Bank of Japan and European Central Bank will ramp up their stimulus programmes. And on Friday, Japan's central bank policymakers 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."

But some were less upbeat, 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 ending 2.8 percent higher. The yen fell to 120.80 against the dollar in the afternoon, compared to 118.60 before the announcement.

"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, predicting the dollar will be worth 130 yen by the end of 2016 and 140 yen by the end of next year.

In other markets, Hong Kong closed up 2.5 percent, 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.

In early European trade, London rose 1.3 percent, Frankfurt jumped 1.4 percent and Paris rallied 1.5 percent.

Before the rally, Shanghai's benchmark 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. The index ended January as the world's worst performer.

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 also pushed higher on Friday, boosted by hopes that talks between the OPEC producers' group, which is responsible for about 40 percent of global output, and Russia could help reduce a supply glut. US benchmark West Texas Intermediate was 2.4 percent higher and Brent added 2.3 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 oil 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, a surplus of supplies and a global economic slowdown, particularly in key user China.