Japan's Nikkei outperforms to reach 5-year high

LONDON (AP) -- Japanese stocks outperformed all others Tuesday as traders in the country returned from a public holiday in buoyant mood, sending the Nikkei index above 14,000 for the first time in nearly five years.

Though Germany's DAX hit another record high, Japan's Nikkei 225 stock average was the standout, surging 3.6 percent to 14,180.24 on its first day of trading following the Golden Week holiday.

"Japanese investors returned from Golden Week national holidays in buoyant mood, bidding stocks in the Nikkei 225 average to their highest since mid-2008," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co.

Because of the holiday, Wilkinson noted that Tuesday's surge was partly a delayed response to Friday's forecast-busting U.S. nonfarm payrolls data for April.

Japanese stocks have been marked up heavily this year after the Bank of Japan announced a new aggressive monetary policy to get the country out of its near two-decade stagnation.

One repercussion of the plan to pump huge amounts of yen into the Japanese economy has been to sharply weaken the currency. Despite numerous attempts, the dollar has failed to breach the 100 yen mark but most currency watchers think it's only a matter of time.

Even so, the dollar is still over 15 percent higher against the yen this year and that's potentially a boon for Japan's powerhouse exporters and for Japanese shares. A lower currency can boost economic growth by making the country's exports cheaper in international markets.

Elsewhere, investors remained largely positive amid a dearth of scheduled economic and corporate news, as they continued to draw encouragement from Friday's better than anticipated U.S. payrolls figures. The data often set the market tone for a week or two after their release.

In Europe, the FTSE 100 index of leading British shares was up 0.6 percent at 6,559 while the CAC-40 in France rose 0.7 percent to 3,933. Germany's DAX was trading 1 percent higher at a new record of 8,195 after surprisingly strong industrial orders figures for March.

In the U.S., the Dow Jones industrial average was up 0.2 percent at 15,005 while the broader S&P 500 index rose 0.3 percent to 1,622. Both indexes have touched record highs in recent days.

The buoyant market mood on Tuesday saw the euro gain ground, too — when investor appetite for taking on risk is elevated, the euro is often in demand. It was trading 0.3 percent higher at $1.3113.

Earlier in Asia, Hong Kong's Hang Seng rose 0.6 percent to 23,047.09, while South Korea's Kospi fell 0.4 percent to 1,954.49 . Mainland Chinese shares were higher. The Shanghai Composite Index gained 0.2 percent to 2,235.58 and the smaller Shenzhen Composite Index added 0.1 percent to 955.33.

Australia was in focus after the Reserve Bank of Australia lowered its official interest rate by a quarter percentage point to 2.75 percent amid signs the economy is coming off the boil, partly on the back of a strong currency. The appreciation of the Australian dollar can hurt exports.

Following the reduction, the Aussie dollar took a dive and was trading 0.7 percent to $1.0180. However, the S&P/ASX 200 stock index fell 0.2 percent to 5,143.70.

Oil prices drifted lower after a strong run, with the benchmark New York rate down 35 cents at $95.81 a barrel.