October 31, 2014 / 5:56 AM / 3 years ago

Nikkei rallies to seven-year high after BOJ eases, yen at 2008 low

TOKYO (Reuters) - Japan’s Nikkei stock average surged to a seven-year high and the yen tumbled to its lowest since early 2008 against the dollar on Friday as the Bank of Japan caught markets flat-footed with its surprise monetary easing decision.

The Nikkei surged over 5 percent to hit 16,455.84, its highest since November 2007.

The dollar jumped more than 1 percent to hit 110.69 yen, its highest since January 2008.

The BOJ unexpectedly eased monetary policy on Friday in a 5-4 vote, due to concerns that a decline in oil prices would weigh on consumer prices and delay a shift in sentiment away from deflation.

The central bank decided to increase the pace at which it expands base money to about 80 trillion yen ($723 billion) per year. Previously, the BOJ targeted an annual increase of 60-70 trillion yen.

($1 = 110.5900 Japanese yen)

Reporting by Shinichi Saoshiro and Ayai Tomisawa; Editing by Prateek Chatterjee

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