Japan Nikkei climbs and yen weakens on G7 intervention

Japanese shares have climbed and the yen weakened after finance ministers from the G7 group of the world's richest countries agreed to step into the currency market.

The Nikkei 225 stock index rose 2.7% to 9,205.67, while the yen weakened against the US dollar to 81.21.

The yen hit a post-World War II high of 76.25 yen earlier this week, raising concerns about Japan's recovery.

Analysts said markets will remain volatile.

Also on Friday, the Bank of Japan said it would pump another 3tn yen ($38bn; £24bn) into the financial system, bringing the total cash injected by the bank this week to 37tn yen.

Big falls

Exporters gained the most from the G7's move, as a weaker yen makes their products cheaper to customers overseas.

Semiconductor manufacturer Tokyo Electron rose 3.4%, while electronics group TDK was up 3%.

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US Dollar v Japanese Yen

Last Updated at 18 Mar 2011, 05:00 GMT *Chart shows local time

$1 buys	change

The Nikkei has seen some of its most volatile trading in the past week.

The index fell more than 16% over Monday and Tuesday, its biggest two-day fall for 23 years, before rebounding on Wednesday.

However, concerns about the strength of the yen pushed the index lower on Thursday.

"The main things investors are worried about now are the nuclear plant, impact of the earthquake and tsunami on firms and power cuts putting pressure on Japanese manufacturers," said Norihiro Fujito at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.

However, following the decision by the G7 to intervene in the currency markets, the focus may now shift away from the yen.

Not least because there there are plenty of other concerns occupying investors, analysts said.