Australian shares look set to rise today as the full benefit of Japan's surprise move to negative interest rates washes through the local market.

The Bank of Japan's announcement on Friday that deposits would be charged at minus 0.1 per cent - a move to stimulate the faltering Japanese economy - lifted Australian stocks on Friday afternoon but AMP chief economist Shane Oliver says further benefit is still to come after gains in the US and Europe.

"I don't think we got the full impact of the BoJ move because in the initial aftermath the Japanese sharemarket rallied, then fell, then rallied again. A lot of that rebound was after our market close," Dr Oliver said.

On Friday, the benchmark S&P/ASX200 index finished up 29.3 points, or 0.59 per cent, at 5005 points while the All Ordinaries index ended up 28.5 points, or 0.57 per cent, at 5056.6.


The ASX SPI200 futures index was up eight points to 5010 on Sunday, pointing to further gains fuelled by a rally in US stocks on Friday.

Japan's rate cut helped the Dow Jones industrial average end 2.47 per cent higher at 16,466.30 - Wall St's best day since September - while the S&P 500 gained 46.88 points or 2.48 per cent higher to end at 1940.24.

Dr Oliver said the rebound in global equities last week could be expected to continue this week, while longer term shares could trend higher, albeit with volatility.

Eyes will be on the Reserve Bank of Australia tomorrow for its rates decision, with most economists expecting rates to remain unchanged as the central bank assesses the fallout of continuing low inflation and fragile global growth, he said.

He expected an official rate cut in coming months due to slow global growth, low commodity prices hitting export income and slowing in the housing sector.

Also commanding attention this week will be Chinese, US and Australian manufacturing data today, as well as the latest RP Data Core Logic measure of housing prices for January. Dr Oliver said the housing figures were expected to show a slight softening in prices.

Building approvals for January are released on Wednesday while retail sales figures for December on Friday, will give a reading of Christmas sales and the December quarter.