FTSE 100 up on bank news and Japan move

(Close): The London market was up 1.28%, buoyed by a rise in bank shares and news of a stimulus boost from the Bank of Japan (BOJ).

Overnight, the BOJ surprised markets by stepping up the rate at which it bought government bonds to 80 trillion yen ($716bn) a year.

The news boosted global markets, and the FTSE 100 was up 82.92 points at 6,546.47 by its close.

Bank shares were up across the board after proposals by the Bank of England for them to hold more money against the possibility of a future economic downturn were not as severe as feared.

Barclays, which analysts had judged most at risk from the BoE announcement on leverage ratios, jumped 8.2% to close at 240.80p

RBS shares closed at their highest level since July 2011. They were 6.2% up at 388p a share after the bank reported third-quarter profits of £1.27bn.

The profits beat analysts' expectations, although the bank also said it had set aside £400m to cover potential costs from an investigation into alleged manipulation of the foreign exchange market.

Another one of the biggest risers was British Airways owner IAG. It closed 4.74% up after it increased its guidance for annual operating profits.

In the FTSE 250, shares in Superdry owner Supergroup fell 6.21% after the company cut its profit guidance following the recent spell of mild weather.

The warm weather in September and October has hit demand for winter clothing, and Supergroup now expects profits in the year to April to be £60m-£65m compared with analysts' forecasts of £70m.

On the currency markets, the pound fell slightly against the dollar to $1.5999 and rose 0.56% against the euro to €1.2758.