Tokyo stocks soar on easing measures TOKYO stocks have soared, hitting record volumes as investors embraced sweeping new Bank of Japan stimulus measures which sent the yen plunging, spelling good news for the key export sector. The scope of the Bank of Japan action on Thursday - including doubling the money supply - took some analysts and investors by surprise, despite expectations of major moves by the bank in its first meeting under new governor Haruhiko Kuroda. The yen slumped against the US dollar and euro after Thursday's announcement, the benchmark Nikkei jumped and bond yields hit a record low as Kuroda vowed no let-up in the battle against the decades of deflation that has weighed on the world's third-largest economy. The Nikkei soared over four per cent in early Friday trade, past 13,100 to intra-day highs last seen in August 2008 just before the global financial crisis rocked markets. It ended Friday's session up 1.58 per cent, or 199.10 points, to 12,833.64 on its biggest volume since the Tokyo Stock Exchange opened in 1949, with 6.45 billion shares changing hands. The broader Topix index of all first-section shares jumped 2.74 per cent, or 28.48 points, to finish at 1,066.24. Shares were boosted by a tumbling yen, which sank to a three-and-a-half year low against the US dollar, with the greenback buying Y96.35 against Y96.33 in New York late on Thursday, after jumping as high as Y97.05 earlier on Friday. The US dollar was trading below Y93 before the BoJ announcement. The euro bought Y124.59 from Y125.20 in US trade, after soaring to Y125.43 in earlier Tokyo trade on Friday. Monetary easing tends to weaken yen, which makes Japanese goods more competitive overseas and lifts companies' foreign-earned profits when converted back to yen. Investors have so far given a thumbs up to the economic policies of Prime Minister Shinzo Abe, dubbed "Abenomics," after he swept December elections on a pledge to kick-start Japan's lumbering economy. "Japanese stocks had long been undervalued, so the gain is justified," said Daisuke Uno, chief market strategist of Sumitomo Mitsui Banking Corp. But we also need to keep an eye on the downside of the fresh easing measures.... We don't know where this gamble will take us. Abe on Friday applauded the BoJ, with Japanese media quoting him as saying the market reaction was "exactly what the measures were expected to do." Kuroda, meanwhile, brushed off worries of an asset-price bubble, a big fear in Japan after the past two decades of limp growth followed a huge stock and real-estate bubble in the late 1980s. Boston University professor William Grimes warned there "are no guarantees" after years of tepid policy action from the central bank. "Deflationary expectations are much more firmly entrenched among Japanese companies and consumers (now)," he said. Also, Japan's fiscal situation has become much worse. Japan, which has proportionately the worst debt load among industrialised nations, has been wrestling with falling prices for years, putting the brakes on growth because it encourages people to put off buying goods in the hopes of paying less down the road and hurting producers in the process. In Tokyo stock trading, exporters gained with Sony finishing up 0.44 per cent to Y1,580, while Canon jumped 1.54 per cent to Y3,290, Toyota rose 3.35 per cent to Y5,090 and industrial giant Hitachi finished up 3.01 per cent to Y547.