New York, Tokyo: Global equity markets rallied and the yen fell to a nearly seven-year low against the dollar on Friday after the Bank of Japan (BoJ) surprised financial markets by ramping up its massive stimulus program.

MSCI’s all-country world equity index rose 0.9 per cent, while the FTSEurofirst 300 index of top European shares gained 1.8 per cent. In Tokyo, the Nikkei slumped 4.8 per cent.

On Wall Street, the Dow Jones Industrial Average hit a record intraday high and the benchmark S&P 500 came within 0.25 per cent of its record.

The Dow was up 188.93 points, or 1.10 per cent, at 17,384.35.

The Standard & Poor’s 500 Index was up 21.07 points, or 1.06 per cent, at 2,015.72. The Nasdaq Composite Index/swas up 61.78 points, or 1.35 per cent, at 4,627.92.

The unexpected jolt from the BoJ put the dollar on track for its biggest daily gain against the yen in 18 months, while driving gold and silver to their lowest since 2010.

The stronger dollar also pushed Brent crude toward its steepest monthly decline since 2012 as the oil benchmark fell below $85 a barrel.

Equity markets surged as the BoJ decision to buy more assets helped ease concerns about the end of the US Federal Reserve’s own stimulus program and the European Central Bank’s reluctance to date to engage in large-scale bond-buying.

The BoJ’s board voted 5-4 to accelerate its buying of government bonds, in a surprise move Friday to shore up sagging growth in the world’s No. 3 economy.

The Bank of Japan said it would increase its purchases of government bonds and other assets by between 10 trillion yen and 20 trillion yen ($91 billion to $181 billion) to about 80 trillion yen ($725 billion) in total annually.

BoJ Gov. Haruhiko Kuroda said the increase was required to prevent a reversal into a “deflationary mindset” that the country’s leaders contend has stymied growth for many years. Countering such a trend is “the most important thing we can do,” Kuroda said. “Whatever we can do, we will.”

Also, Japan’s $1.2 trillion Government Pension Investment Fund announced new portfolio allocations that will double its holdings of domestic and foreign stock holdings.

“It’s not just the (BoJ’s) easing, but the asset allocation from the pension plan is of course also helpful,” said Paul Zemsky, chief investment officer of multi-asset strategies and solutions at Voya Investment Management in New York.

“Economic growth (in the United States) is looking pretty good, earnings are good ... we will end the year certainly closer to 2,100 than 2,000 on the S&P 500.”

The dollar surged past its Oct. 1 high of 110.09 yen, rising as far as 112.42 yen, its highest since January 2008. The greenback climbed 3.2 per cent on the day, on course for its biggest gain since April 2013.

The euro jumped to a six-week high against the yen

of 140.70 yen, and fell 0.83 per cent to $1.2507

against the dollar.

The dollar index, a measure of the greenback against six major currencies, was up 1.14 per cent at 87.132.

US Treasury debt prices fell as investors moved away from safe-haven bonds and grew more optimistic about prospects for the world’s largest economy.

Benchmark 10-year Treasury notes fell 12/32 in price to yield 2.3461 per cent.

Brent crude oil fell below $85 a barrel on a firmer dollar and a well-supplied market.

Brent for December was down $1.43 at $84.81 a barrel. US crude was down $1.29 at $79.83.