Yen Soars as Markets Test BOJ, Stocks Cheered by Inflation Retreat

Passersby walk past electric monitors displaying Japan's Nikkei share average and the exchange rate between the Japanese yen against the U.S. dollar outside a brokerage in Tokyo, Japan, on Dec. 30, 2022. Issei Kato/Reuters

LONDON—World stocks scaled one-month peaks on Friday thanks to signs inflation is easing, while the yen jumped to seven-month peaks and Japanese bond yields breached a central bank target as investors challenged its commitment to loose monetary policy.

European shares opened higher and the broad STOXX 600 index touched its highest since April, while Asian-Pacific shares outside Japan hit a new seven-month high and was headed for a third consecutive week of gains.