European stocks retreated for a second day as the Bank of Japan refrained from expanding stimulus and Treasuries sank amid speculation the Federal Reserve will trim bond purchases.

The BOJ today refrained from expanding its tools to rekindle inflation and stoke growth, sticking with an April pledge to increase the monetary base by 60 trillion yen ($620 billion) to 70 trillion yen a year.

Germany's Federal Constitutional Court began a two-day hearing to address the ECB's OMT program, which was introduced last year as concerns peaked that the euro region would break apart. The as-yet-unused OMT foresees potentially unlimited purchases of bonds of debt-stricken countries that sign up to adjustment programs.

National benchmark indexes dropped in all 18 western European markets today. France's CAC 40 lost 1.4 percent while Germany's DAX declined 1 percent and the U.K.'s FTSE 100 fell 0.9 percent.

Legrand fell 4.1 percent to 35.59 euros. Wendel, France's biggest publicly traded investment firm, offered the remaining shares it holds at 36 euros apiece. The company said it made a capital gain of about 370 million euros. Wendel lost 1.5 percent to 83.92 euros.

ICAP dropped 3.6 percent to 359.9 pence, its biggest decline in two months, after Credit Suisse cut the world's largest broker of transactions between banks to underperform from neutral, meaning investors should sell the shares, citing a high level of uncertainty over volume trends.

Fonciere des Regions slipped 3 percent to 60.54 euros after saying it will spend close to 1 billion euros to lift its stake in Fonciere Developpement Logements to between 58.2 percent and 62.4 percent and increase its presence in Germany. Fonciere Developpement rose 6.9 percent to 18 euros.