Nikkei climbs past 17,000 to 7-year peak Tuesday 02.50 GMT. Japanese stocks rallied to their highest point since 2007 after a three-day weekend, as investors put faith in the power of policy makers to revive the Japanese economy. When the Bank of Japan stunned investors on Friday with a new wave of monetary stimulus, traders in Tokyo had less than 80 minutes to react before the closing bell. The Nikkei 225 climbed 4.8 per cent in a knee-jerk reaction and on Tuesday, after a three-day weekend, it rose a further 4.3 per cent in the opening minutes of trading. The average crossed 17,000 for the first time since 2007, peaking at 17,127, before euphoria calmed somewhat and the gain moderated to 4.0 per cent. The BoJ had for months promised to act if its 2 per cent inflation target looked questionable but few investors or analysts were expecting a move so quickly. Analysts at Nomura said: "The BoJ's decision can be seen as an indication of a stronger commitment to the 2 per cent inflation target than we had previously thought, and also of the BoJ's determination to act decisively and proactively in order to achieve this target." Moreover, the monetary easing was delivered alongside new allocation targets from Japan's $1.2tn pension fund, which will now invest up to 25 per cent into domestic equities, up from 12 per cent. Crédit Agricole called the moves a "one-two punch" for the yen, which overnight fell to a seven-year low of 114 against the US dollar. Elsewhere in Asia, markets were fairly subdued. Sydney's S&P/ASX 200 was up 0.1 per cent, while Hong Kong's Hang Seng added 0.3 per cent and the Shanghai Composite edged up 0.1 per cent. In Australia, investors were being cautious as they awaited a monetary policy update from the central bank later in the day. Fresh data failed to clarify the state of the economy. Retail sales jumped 1.2 per cent in September, smashing forecasts with their best month since February 2013. But at the same time Australia recorded its biggest trade deficit since November 2012. Imports rose 6 per cent from the prior month, while exports rose just 1 per cent. As a result the trade deficit was A$2.261bn, the sixth straight gap and the first time it has been bigger than A$2bn since late 2012. "Such conflicting news and market volatility are guaranteed to keep the RBA on the sidelines until the picture clears," said Annette Beacher at TD Securities. After some volatility the Aussie dollar rose 0.1 per cent but remained near a four-year low against its US counterpart. Adding to the confusion, Australia's statistics bureau once again published revisions to recent labour market data. The biggest change: in July and August the economy lost 9,000 jobs, whereas earlier it estimated a gain of 32,100 jobs. The unemployment rate is now estimated at 6.2 per cent, up from 6.1 per cent. The renewed attempt to clarify the numbers appeared to have failed: "Given the unprecedented problems with these figures, we have little faith that the revised figures are providing a more accurate read on the labour market," wrote Barclays analysts. Overnight, the US dollar index jumped 0.4 per cent to 87.275, its highest level since 2010, but the Wall Street rally faded despite some strong data as investors were hesitant to push US stocks beyond the all-time high reached on Friday. The US ISM manufacturing index for October surged to 59.0, well above analyst forecasts of 56.2 and matching its highest level since March 2011, stoking speculation of an earlier rate rise from the Federal Reserve and putting pressure on US Treasury prices.