Tokyo's Nikkei index closes up 4.83 per cent at seven-year high

TOKYO - Tokyo shares soared 4.83 per cent to a seven-year high on Friday after the Bank of Japan ramped up its vast monetary easing programme, sending the yen into freefall.

The benchmark Nikkei 225 index surged 755.56 points to 16,413.76, its best close since November 2007, while the Topix index of all first-section issues jumped 4.28 per cent, or 54.74 points, to 1,333.64.

BoJ policymakers said they would step up the pace of the central bank's asset-buying plan by as much as 20 trillion yen (S$230 billion), bringing it to 80 trillion yen annually.

On forex markets, the yen plunged to an almost seven-year low of 111.0 against the dollar following the BoJ's decision to pump even more money into the economy after a second-quarter contraction.

A weak yen is good for Japanese exporters as it makes them more competitive abroad and inflates their repatriated profits.

In morning trade before the BoJ announcement, stocks had risen 1.68 per cent as forecast-beating US growth data offset another poor set of domestic economic indicators.

Investors also cheered reports that Japan's national pension fund, the world's largest, will double the amount of equities it holds in its investment portfolio as it seeks out higher returns to cope with an ageing population.

A raft of September Japanese economic data released early Friday showed a 5.6 per cent drop in household spending, inflation slowing and unemployment rising.

However, dealers were in buying mood as the dollar jumped against the yen in response to data showing US economic growth expanding at an annualised 3.5 per cent in July-September, against estimates of a 3.0 per cent rise.

In Tokyo, Toyota jumped 3.80 per cent to 6,498.0 yen, while Panasonic gained 3.28 per cent to 1,305.0 yen.

Sony rose 0.82 per cent to 2,072.0 yen. Following the closing bell, Sony said its net loss for the April-September period ballooned to nearly US$1 billion.

Fujitsu shares dropped 3.72 per cent to 664.4 yen a day after it said its operating and net profits declined in the second quarter.

On Wall Street, strong earnings by credit card giant Visa sent its stock soaring by more than 10 per cent, almost single-handedly powering the blue-chip Dow index to a 1.3 per cent gain.