Tokyo stocks hit 7-year high on further monetary easing

Tokyo stocks sharply rose Friday, driving a key index to hit a seven-year high, after the Bank of Japan (BOJ) announced an unexpected expansion of its monetary easing measures.
The benchmark Nikkei 225 Stock Average on the Tokyo Stock Exchange (TSE) jumped 755.56 points, or 4.83 percent, from Thursday to 16,413.76, its highest finish since November 2, 2007.
The broader Tokyo Stock Price Index, which includes all shares on the market's First Section on the TSE, was also up 54.74 points, or 4.28 percent, to 1,333.64, with 32 of 33 sub-indexes ending in positive territory.
The market was cheered by BOJ's surprised announcement to further ease monetary policy by increasing monetary base and purchases of government bonds to boost the country's economy and end deflation.
At a one-day policy meeting, the BOJ decided to increase the monetary base at an annual pace of about JPY 80 trillion (USD 720 billion), up from the current JPY 60-70 trillion (USD 540-630 billion). The BOJ will also increase purchases of government bonds exchange-traded funds and Japan real estate investment trusts.
The yen's depreciation against the US dollar also prompted investors to buy export-oriented issues in Tokyo. The weak yen supports exports by making Japanese products more competitive overseas and increase the value of repatriated overseas earning.
The US dollar hit a six-year high against the yen to reach JPY 111.53 at one point, its highest level since January 2, 2008. At 6 pm (0900 GMT), the dollar fetched JPY 111.46-48 against JPY 109.17-27 in New York and JPY 109.17-19 in Tokyo at 5 pm Thursday.