European shares hit five-year highs

The yen sank to a four-year low against the dollar on Friday on robust US jobs data and signs Japanese investors have begun buying foreign bonds, denting safe-haven German paper and helping lift European shares.

The dollar's jump to a peak of 101.20 yen came as finance ministers and central bankers of the G7 countries gathered for a two-day meeting near London, with currency movements one of the topics on the agenda.

It was spurred past the key 100 level when weekly US jobless claims fell to five-year low, just over month after the Bank of Japan unveiled a massive stimulus plan to boost the economy.

Dealers said signs of the gathering economic momentum in the giant US economy was likely to drive the dollar higher. " I think we might see a move up to 101.50 (yen) and then a pullback. But I would be a buyer of any dips at the moment," said ETX Capital's Head of Trading Joe Rundle.

The euro also rose, to 131.91 yen, its highest since January 2010.

The German Bund future was down 45 ticks down at 145.62 from Thursday's 145.89 close.

European equities drew some strength from the improving economic outlook and the current central bank stimulus effort to hit five-year highs, with the broad FTSEurofirst 300 index up 0.1 percent at 1,229.97 points in early trade.