VENTURE CAPITAL POST

The Dow and S&P 500 ended at record highs on Friday and other indexes posted strong gains for a second week after the Bank of Japan's surprise move to ramp up its stimulus program.

With just five months left before Governor Haruhiko Kuroda's self-imposed deadline for banishing deflation, the Bank of Japan is preparing for failure, and the first casualty could be its facade of board unity.

Evaporating inflation and slowing growth have put financial markets into such a spin that they could inflict further damage on the world economy.

U.S. housing starts and permits rose in September, a signal the market's modest recovery is supporting what appears to be growing strength in the broader economy.

Global shares fell to a six-month trough and Brent crude futures tumbled to their lowest since 2010 on Friday as investors worried about the prospect of a widespread economic slowdown just as U.S. monetary stimulus nears its end.

The Bank of Japan on Tuesday maintained its massive asset buying program but offered a bleaker view on factory output, following signs that the world's third-largest economy was hit harder than expected by a sales tax increase in April.

World policymakers gather in Washington later this week to ponder how to sustain economic recovery at a time when the United States is about to turn off its money taps.

The European Central Bank will present details on Thursday of a new asset-buying plan with which it hopes to revive the flagging euro zone economy and see off the specter of deflation.

The dollar held near a four-year high against a basket of currencies on Friday, fueled by the biggest yield advantage over the euro in nearly 15 years as the Federal Reserve contemplates hiking interest rates.

Activity in China's manufacturing sector unexpectedly picked up in September even as factory employment slumped to a 5-1/2-year low, a survey showed on Tuesday, a potential source of worry for Communist leaders who prize social stability above all else.

Scotland's rejection of independence and a lack of any fireworks at a Fed meeting last week have calmed investors enough to shift the focus back to what some call the "Great Stagnation", and how to avoid it.

Financial leaders of the Group of 20 top economies remain committed to chasing higher global growth, but were divided on how to achieve it as Germany pushed back at calls from the United States and others for more immediate stimulus.

The Bank of Japan bought one-year government bills at negative yields in market operations on Friday, traders said, setting a new milestone as it pushes its aggressive asset purchase scheme.

China does not need strong policy stimulus as long as economic growth hovers within the government's targeted range, a policy adviser to the People's Bank of China said on Thursday, an indication Beijing will continue with targeted steps to support growth.

The temporary increase of the food stamp program would end by the end of this month.