The U.S. dollar briefly hit a five-year high in the upper 115 yen range on Tuesday, while Tokyo stocks surged to bring the Nikkei index to its highest level since late November on the first trading day of 2022.

At 5 p.m., the dollar fetched 115.73-75 yen compared with 115.28-38 yen in New York at 5 p.m. Monday. Japanese financial markets were closed Friday and Monday due to the year-end and New Year holidays.

The euro was quoted at $1.1290-1292 and 130.66-70 yen against $1.1294-1304 and 130.26-36 yen in New York late Monday afternoon.

Japanese Finance Minister Shunichi Suzuki rings the bell at the Tokyo Stock Exchange on Jan. 4, 2022, during a ceremony to mark the first trading day of the year. (Kyodo)

The 225-issue Nikkei Stock Average ended up 510.08 points, or 1.77 percent, from Thursday at 29,301.79, its highest close since Nov. 25 and marking the first gain since 2018 in the trading sessions at the start of the year.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 37.89 points, or 1.90 percent, higher at 2,030.22.

Gainers were led by marine transportation, transportation equipment and insurance issues.

The dollar rose to the upper 115 yen range, the highest level since January 2017, on growing expectations for an early interest rate hike by the U.S. Federal Reserve after an overnight rise in U.S. Treasury yields, dealers said.

It was also pushed up on increased risk appetite, with "investors motivated to buy the U.S. dollar in tandem with a surge in Tokyo stocks," said Yuji Saito, head of the foreign exchange department at Credit Agricole Corporate & Investment Bank in Tokyo.

Market participants may try to test the 116 yen range now that the dollar has topped the mid-115 yen level logged in November, he added.

Meanwhile, investors bought a wide range of issues in Tokyo after the Dow Jones and S&P 500 indexes closed overnight at all-time highs. The Nikkei benchmark extended gains in the afternoon, advancing over 500 points, or nearly 2 percent.

Technology issues were particularly strong after Apple Inc. became the first U.S. company with a market value topping $3 trillion on Monday.

The market's reaction to the highest daily number of coronavirus cases in Tokyo in three months on Monday at 103 was limited due to reports that the Omicron variant, which has been rapidly spreading, was less likely to cause hospitalization, brokers said.

On the First Section, advancing issues outnumbered decliners 1,625 to 494, while 64 ended unchanged.

Apple supplier Alps Alpine jumped 54 yen, or 5.0 percent, to 1,139 yen, while Murata Manufacturing, also a supplier, added 227 yen, or 2.5 percent, to finish at 9,384 yen.

Automakers were among export-oriented issues boosted by the weakening yen. Nissan Motor climbed 34.3 yen, or 6.2 percent, to 590.1 yen, Mazda Motor surged 51 yen, or 5.8 percent, to 936 yen, and Suzuki Motor was up 94 yen, or 2.1 percent, at 4,523 yen.

Trading volume on the main section rose to 1,109.93 million shares from Thursday's 729.84 million shares.

The yield on the benchmark 10-year Japanese government bond rose 0.015 percentage point from Thursday's close to 0.085 percent, the highest level since November as it tracked a rise in U.S. Treasury yields.

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