LONDON — Japanese stocks outperformed all others by a wide margin Friday after the dollar finally broke through the 100 yen mark. Markets elsewhere remained solid at the end of the week that's sent many indexes around the world up to all-time highs.
The Nikkei 225 index in Tokyo jumped 2.9 percent to close at 14,607.54, its highest level since January 2008, after the dollar traded above 100 yen for the first time in more than four years – a lower currency potentially makes the country's exports cheaper. By late afternoon London time, the dollar was 1.1 percent higher at 101.73 yen.
"The Nikkei continues to dazzle. ... Japanese stocks have now surged more than 40 percent so far in 2013," said Robert Kavcic, an analyst at BMO Capital Markets.
The yen has been under acute pressure over recent weeks as the new government of Prime Minister Shinzo Abe attempts to get the world's number 3 economy out of its two-decade stagnation. A key pillar of that attempt has been to give the Bank of Japan the tools to pursue a super-loose monetary policy that creates more yen in circulation.
The yen is likely to feature in discussions later between the finance ministers and central bankers of the world's leading industrial economies. The policy of benign neglect over the yen's depreciation has been based on the belief that Japan's policymakers have not directly targeted the exchange rate.
"In a way, this recent yen move could not have been more badly timed, coming as it does on the eve of the latest G-7 meeting, with further yen losses quite likely," said Michael Hewson, senior markets analyst at CMC Markets.
Elsewhere, European stocks continued their strong run, with Britain's FTSE 100 closing up 0.5 percent at 6,624.98. Germany's DAX rose 0.2 percent to 8,278.59 while France's CAC-40 advanced 0.6 percent to 3,953.83.
In the U.S., the Dow Jones industrial average was up 0.1 percent at 15,092 while the broader S&P 500 index rose 0.2 percent to 1,630.
Many indexes around the world, including Germany's DAX and the Dow and the S&P in the U.S. have hit a series of all-time highs this week for a number of reasons, including hopes over the U.S. job market and a seeming easing of Europe's debt crisis. An expectation that the world's central banks will not be reversing course and tightening policy any time soon has also lain behind the seeming euphoria in markets.
Elsewhere in Asia, South Korea's Kospi plummeted 1.8 percent to 1,944.75 amid jitters over competition with Japan, whose weakened currency puts South Korean exporters at a disadvantage. Hong Kong's Hang Seng gained 0.5 percent to 23,321.22.
Oil prices fell sharply as a strengthening dollar made crude more expensive for traders using other currencies – as well as pushing ahead against the yen, the dollar was buoyant against the euro, which was trading 0.6 percent lower at $1.2956.
The benchmark New York rate was down $2.55 at $93.84 a barrel.
Pamela Sampson in Bangkok contributed to this report.