NEW YORK (AP) — Stocks in the U.S. and across the globe rose sharply Friday after the Bank of Japan unexpectedly announced a new stimulus package to boost the country's struggling economy. Japan's stock market jumped 4.8 percent to reach its highest level since 2007.

KEEPING SCORE: The Dow Jones industrial average rose 137 points, or 0.8 percent, to 17,330 as of 10:03 a.m. Eastern time. The Standard & Poor's 500 index rose 14 points, or 0.7 percent, to 2,009 and the Nasdaq composite rose 54 points, or 1.2 percent, to 4,620.

KONNICHIWA! The Bank of Japan surprised investors by announcing it would increase its bond and asset purchases by between 10 trillion yen and 20 trillion yen ($90.7 billion to $181.3 billion) to about 80 trillion yen ($725 billion) annually. The announcement came after economic data showed that Japan's economy remained in the doldrums following a sales tax hike in April. Japan's inflation slipped and household spending fell in September and the country's unemployment ticked up.

The move comes shortly after the U.S. Federal Reserve brought an end to its own bond-buying program. Investors have been hopeful that the European Central Bank might also start buying bonds to stimulate that region's economy by keeping interest rates low and injecting cash into the financial system. That form of stimulus is called quantitative easing, also known among investors as "QE."

"The Japanese central bank has taken the QE baton from the Fed, and equity traders couldn't be happier," said David Madden, market analyst at IG.

The yen weakened sharply following the Bank of Japan's announcement. The yen slumped 2.7 percent against the dollar to 112 yen. The Japanese currency is trading at the lowest level in more than five years. Japanese companies typically like a weak Japanese yen because it makes their goods cheaper abroad. In an export-heavy economy like Japan, that is very important.

EUROPE FOLLOWS SUIT: European stock markets rose broadly following the Bank of Japan's announcement on hopes that the European Central Bank could be tempted to follow Japan's lead in stepping up stimulus measures. However, few think anything will be announced at the ECB's next policy meeting next Thursday.

"The willingness of the Bank of Japan to ease further in the fight against deflation will encourage those who think the ECB should be doing the same," said Julian Jessop, chief global economist at Capital Economics.

Britain's FTSE 100 rose 1 percent. France's CAC 40 jumped 2.2 percent and Germany's DAX climbed 2.1 percent.

BACK IN ACTION: After a volatile month, U.S. stocks are on pace to end the month broadly higher. The Dow is up 1.7 percent for October, while the S&P 500 is up 1.9 percent and the Nasdaq is up 3.1 percent. All three indexes had been down as much 3-5 percent for the month only two weeks ago.

COMMODITIES AND BONDS: U.S. crude oil fell $1.41 to $79.71 a barrel on the New York Mercantile Exchange. The contract dropped $1.08 to settle at $81.12 on Thursday. Brent crude, used to price oil in international markets, dipped 88 cents to $86.24 in London. The U.S. 10-year Treasury note was mostly unchanged at 2.33 percent.