Buoyed by Yellen, stocks flirt with new milestones NEW YORK Global equity markets rose on Friday after President Obama's choice to lead the Federal Reserve signaled the U.S. central bank's stimulative monetary policy would stay in place for some time, while the dollar rose to a two-month high against the yen. Janet Yellen's comments, interpreted as showing there would be no cut in monetary stimulus any time soon, sparked a rally on equity markets and dented the low-yielding yen, which typically falls when investors are looking to take on risk. U.S. stocks rose, with the Dow Jones industrial average and Standard & Poor's 500 Index hitting intraday record highs. The Dow rose 86 points, or 0.5 percent, to close 15,962. The S&P 500 500 added 8 points to end just shy of 1,800, at 1,798, while the Nasdaq composite index also climbed. Yellen, now the Fed's vice chair, defended the U.S. central bank's steps to spur economic growth and called efforts to boost hiring "imperative" during a hearing on Thursday on her nomination before the U.S. Senate Banking Committee. "There's a sincere expectation that monetary policy will be calibrated according to economic conditions," said Jeff Knight, head of global asset allocations at Boston-based Columbia Management, with $345 billion in assets under management. At least for now the Fed does not regard the impact of its bond purchases on asset prices a reason to stop tapering. There will be an analysis of economic conditions. That's important information," he said. Yellen's confirmation as Fed Chair would be important milestone The dollar rose 0.23 percent to 100.26 yen, having hit a high of 100.43 yen that left it the potential to target the September 11 high of 100.60 yen. The yen fell broadly, with sterling hitting a four-year high against the Japanese currency. China on Friday announced a raft of reform plans, including accelerating capital account convertibility, but this had little impact on sentiment. Against a basket of currencies, the dollar eased marginally to 80.858. "The dollar only reacted very moderately as Yellen signaled continuity," said George Saravelos, currency strategist at Deutsche Bank in London. However, he said her remarks were enough to spark a rally in riskier assets and weigh on the yen. The Australian and New Zealand dollars, which offer higher yields than many other currencies and often gain when investor risk appetite increases, both rose. The Australian dollar was up 0.42 percent at $0.9364, while the New Zealand dollar rose 0.65 percent to $0.8328. The euro was up 0.19 percent at $1.3485, below a one-week high of $1.3497 touched on Thursday. It remains under pressure from the disparity between the U.S. and European economies - underlined by weak euro zone GDP numbers on Thursday, which kept alive the possibility of more central bank action to stimulate growth. The euro rose against the yen, however, hitting a two-week high of 135.08 yen. An index of world equity markets marched higher after Yellen told the confirmation hearing that efforts to boost hiring were "imperative" for promoting a strong U.S. economic recovery. MSCI's all-country world stock index rose 0.56 percent, while the pan-European FTSEurofirst 300 index of leading regional shares gained 0.28 percent to close at 1,297.85. Japanese equities, made cheap for foreign investors by a falling yen, led the charge, jumping 1.95 percent to bring gains for the week to a heady 7.65 percent, the Nikkei index's biggest weekly rise since December 2009. In commodity markets, Brent crude rose above $108 a barrel, headed for its biggest weekly gain since late August on expectations the Fed would stick with its easy money policy. Brent for January delivery was last up 10 cents at $108.38 a barrel, while U.S. crude was up 12 cents at $93.88. Spot gold was at $1,287.41 an ounce, well above the week's trough of $1,260.89. Additional reporting by Nick Olivari and Richard Leong in New York; Editing by Dan Grebler