The ECB cut its deposit rate to a record low minus 0.5% from minus 0.4% and will restart bond purchases of €20 billion ($22 billion) a month from Nov.1, according to a statement by the ECB's Governing Council.
The central bank for the 19 Eurozone countries said it would cut the rate on deposits - a penalty rate that pushes banks to lend excess cash - from minus 0.5 per cent to minus 0.4 per cent in its latest quantitative easing efforts.
Euro zone stocks were little changed on Thursday, however, highlighting investors' doubts about the effectiveness of European Central Bank policy, which can only prop up domestic confidence, not deliver a U.S. Inflation has begun to fall, the continent is feeling the effects of the trade war between China and the US, and Germany, Europe's largest economy, has been teetering on recession.
Most economists in a new Reuters poll believed the trade dispute will worsen or at best stay the same over the coming year.
Meanwhile, Wall Street was boosted by US President Donald Trump's decision to delay imposing tariffs on Chinese goods by two weeks as a "goodwill" gesture.
Trump said he preferred a comprehensive trade deal with China but did not rule out the possibility of an interim pact, even as he said an "easy" agreement would not be possible.
European stocks are set to track Asia's firmer tone, with pan-region Euro Stoxx 50 futures up 0.1%, Germany's DAX futures up 0.1% and London's FTSE futures higher by 0.2%.
European stocks rose and the euro dipped after the European Central Bank (ECB) announced it will cut deposit rates even further below zero and renew its bond buying program in an attempt to stimulate a sluggish euro-area economy and inspire inflation growth.
Chipmakers such as Micron Technology and Advanced Micro Devices rose 0.5% and 2%, respectively.
But Draghi's critics argue that the euro zone's biggest troubles - a global trade war, Brexit and China's slowdown - are outside the ECB's control, so any stimulus would have a limited impact.
The euro stood at $1.10615 EUR= , having risen 0.5 percent on Thursday and staying near two-week high of $1.10875 (0.8984 pounds) hit in US trade.
The yen was pinned near a six-week low versus the dollar today as signs the United States and China were narrowing their differences over trade ahead of key talks decreased demand for safe haven assets.
That also helped to lift the yield on 10-year U.S. Treasuries to as high as 1.081 percent US10YT=RR , its highest level since early August.
The Fed will announce its policy on Wednesday, followed by the Bank of Japan (BOJ) on Thursday. Markets do not expect rates to rise for almost a decade. "It's typical buy-on-rumor-sell-on-fact trade on central bank stimulus and will be over by the Fed and the BOJ's meetings", said Tatsushi Maeno, senior strategist at Okasan Asset Management.
And Brent crude oil has fallen 0.7 per cent to $US60.40 a barrel.