The yen reached a historic low against the euro and remained close to a four-year low against the dollar on Friday due to expectations of low Japanese rates. Oil prices stayed high around $61 per barrel. Despite Germany's Ifo business sentiment survey showing a larger than expected decline in February, the euro only slightly weakened against the dollar. The survey did not change predictions of an upcoming increase in euro zone interest rates. Japanese exporters benefitted from the weakened yen, boosting the Nikkei average to a seven-year high, while European stocks were affected by concerns over Iran's nuclear program and weakness in banking stocks. The euro briefly hit a record high of 159.63 yen before dropping back to around 159.25 yen, with traders anticipating a break of the 160-yen mark. The dollar traded around 121.40 yen after reaching 121.63 yen for the second consecutive day, approaching the highest level since December 2002. The recent increase of 25 basis points in Japanese interest rates to 0.5 percent, the highest in a decade, has not stopped the yen from weakening against major currencies. Even with this increase, Japanese rates are still lower than in other developed countries. Ronnie Steadman of Lloyds TSB Financial Markets stated that the higher rates in Japan will not deter Japanese investors, especially households, from buying foreign bonds and stocks for better returns. Investors have also taken significant short positions on the yen in carry trades, borrowing yen to invest in higher-yielding assets elsewhere. The New Zealand dollar reached a 14-month high against the yen on Thursday. Bank of Japan Governor Toshihiko Fukui reiterated that rate increases will be gradual. Germany's Ifo research institute reported a decrease in the business climate index to 107.0 in February from 107.9 in the previous month. Analysts still anticipate a European Central Bank rate increase to 3.75 percent in March. The euro was slightly down at $1.311 at 1015 GMT. Euro zone bonds initially dropped but rebounded after the Ifo report, with yields on the benchmark 10-year Bund decreasing by 3.2 basis points to 4.066 percent. Oil prices rose above $61 per barrel to a seven-week high due to a significant decline in US gasoline stocks and concerns regarding Iran's nuclear program. US crude reached $61.40 per barrel, up by 45 cents. It reached $61.49, the highest level since January 2, after Iran's announcement of not showing weakness regarding its nuclear program. Iran failed to meet the Feb. 21 deadline set by the UN nuclear watchdog to suspend uranium enrichment. European shares declined due to concerns about Iran and weakness in banking stocks, despite strong results from industrials and higher commodity prices. The FTSEurofirst 300 index was down 0.16 percent, with slight decreases in British and French indexes and minimal changes in Germany's. Japan's Nikkei increased by 0.44 percent to a seven-year high, driven by gains in exporters like Canon Inc benefiting from the weak yen. The increase in the MSCI All-Country World Index was offset by a significant decrease of up to 29 percent in Sanyo Electric Co. This drop was attributed to the company being investigated by regulators and failing to report over $1 billion in losses, as reported by a newspaper.