NEW YORK (Reuters) - Strong economic data lifted global equity markets and drove the S&P 500 to a five-year high on Friday, while the yen jumped after Japan's finance minister said the currency's recent drop had gone too far, too fast.
Brent crude oil rose to a nine-month high near $119 a barrel and copper prices advanced for the first time in four days as robust Chinese data signaled improving global growth prospects and boosted the outlook for commodities demand.
China's exports and imports surged and new lending soared in January, while German data showed a 2012 surplus that was the nation's second-highest in more than 60 years, an indication of the underlying strength of Europe's biggest economy.
A report showing the U.S. trade gap fell to its narrowest in nearly three years in December helped support stock and commodity markets. The narrower trade gap suggested the U.S. economy did much better in the fourth quarter than initially estimated.
"A potential soft landing in China continues to underpin the bullish argument, so supportive trade data from China is watched closely. The positive surprise in the U.S. trade data, while subject to a large noise factor, is another scrap of positive news for the bullish contingent to latch onto in the quest for Dow 14,000," said Troy Buckner, managing partner at hedge fund NuWave Investment Management LLC in Parsippany, New Jersey.
MSCI's all-country world equity index rose 0.5 percent to 355.56, while shares in Europe rebounded 1.2 percent after a fall on Thursday wiped out the year's gains.
U.S. stocks edged higher. The benchmark S&P 500, up more than 6 percent for the year, is on track for six straight weeks of gains for the first time since August 2012.
But an advance has been tougher in recent days as investors await incentives to drive the index further upward.
"The rally is definitely slowing down. We might see a record but we do need a bit of correction before going there," said Randy Frederick, director of trading and derivatives at Charles Schwab. "We've been in this 1,516 level (for the S&P 500) for the sixth straight session and need to break above to really move higher."
The Dow Jones industrial average gained 40.86 points, or 0.29 percent, to 13,984.91. The Standard & Poor's 500 Index rose 7.73 points, or 0.51 percent, to 1,517.12. The Nasdaq Composite Index added 28.03 points, or 0.89 percent, to 3,193.16.
The yen, which fell to a low against the euro since April 2010 and the lowest against the dollar since May 2010 on Wednesday, got a boost from Finance Minister Taro Aso's comments that the currency's slide from 78 to 90 per dollar was steeper than intended.
Doubts also rose on whether the next governor of the Bank of Japan will ease policy aggressively after a Reuters report said Japanese Prime Minister Shinzo Abe faces opposition from within his own cabinet and financial bureaucrats to appoint a new BoJ governor who will pursue aggressive easing policies.
The dollar fell 0.9 percent to 92.82 yen. The euro lost 1.1 percent to 124.02 yen, and against the dollar, the euro slipped 0.3 percent to $1.3362.
Comments from European Central Bank chief Mario Draghi on Thursday that the exchange rate is important for growth and price stability were perceived by investors as a sign the bank is concerned about the euro's recent advance and weighed on the currency.
"Central bank and government officials from around the world have given FX markets the gift of volatility this year," said Win Thin, senior currency strategist at Brown Brothers Harriman in New York.
"Yesterday, it was ECB President Draghi's second press conference in a row that caught markets by surprise. Today, it was Japan Finance Minister Aso's turn, as he apparently told reporters that the recent pace of yen weakness has been too fast."
The benchmark 10-year U.S. Treasury note was little changed, the yield at 1.9571 percent.
Brent gained $1.66 to settle at $118.90 a barrel, but U.S. crude futures fell 11 cents to settle $95.72.
Three-month copper on the London Metal Exchange was $8,245 a tonne after hitting a session high of $8,253.
Gold fell slightly to $1,667.76 an ounce as the dollar rose against the euro and upbeat economic data lifted investor appetite for riskier assets.
(Additional reporting by Chuck Mikolajczak; Editing by Dan Grebler)