The yen reached a historical low against the euro and remained close to a four-year low against the dollar on Friday due to expectations of low Japanese rates. Meanwhile, oil prices stayed near a seven-week high of over $61. Despite Germany's Ifo business sentiment survey showing a larger than anticipated decrease in February, the euro only slightly decreased against the dollar, leading to an increase in Bunds. However, this did not change predictions that euro zone interest rates will increase next month. Japanese exporters benefitted from the weak yen, boosting the Nikkei average to a seven-year closing high, while European stocks were affected by weakness in banking and concerns over Iran's nuclear programme. The euro reached a record high of 159.63 yen before dropping to around 159.25 yen, with traders expecting the currency to break the 160-yen level soon. The dollar was around 121.40 yen after reaching 121.63 yen for the second consecutive day, not far from the January high of 122.20 yen, the highest since December 2002. This week, Japanese interest rates rose by 25 basis points to 0.5 percent, reaching a decade-high. However, this increase has not halted the yen's decline against major currencies, as Japanese rates are still lower compared to other developed countries. Ronnie Steadman from Lloyds TSB Financial Markets noted that the rise in short-term rates in Japan will not deter Japanese investors, especially households, from purchasing foreign bonds and stocks for better returns. Investors have taken large short positions in the Japanese currency through carry trades, borrowing yen to invest in higher-yielding assets elsewhere. The New Zealand dollar, which offers high yields, reached a 14-month high against the yen on Thursday. Bank of Japan Governor Toshihiko Fukui reiterated on Friday that rate increases will occur gradually. Germany's Ifo research institute reported a decrease in the business climate index to 107.0 in February from the previous month's 107.9. Analysts still predicted a European Central Bank rate hike to 3.75 percent in March. The euro was down by about 0.1 percent at $1.311 at 1015 GMT. Euro zone bonds initially dropped but rebounded after the Ifo report, with yields on the 10-year Bund falling by 3.2 basis points to 4.066 percent. Oil prices rose above $61 a barrel to a seven-week high due to a sharp decline in US gasoline stocks and concerns over Iran's nuclear program. US crude increased by 45 cents to $61.40 a barrel. The price hit $61.49, its highest level since January 2nd. Iran stated it would not show any weakness regarding its nuclear program, after the UN nuclear watchdog announced Tehran had not met the February 21 deadline to halt uranium enrichment. European shares decreased slightly at the opening, due to concerns about Iran and weakness in banking stocks, despite positive results from industrial companies and higher commodity prices. The FTSEurofirst 300 index of top European shares was down 0.16 percent at 1,537.54 points, with small decreases in British and French indexes and minimal changes in Germany's index. Japan's Nikkei rose 0.44 percent to a seven-year high, driven in part by gains in exporters like Canon Inc, who benefit from a weaker yen. The increase was offset by a decline of up to 29 percent in Sanyo Electric Co. following reports of a regulatory investigation and unaccounted losses of over $1 billion. The MSCI All-Country World Index stood at 380.93, up 0.05 percent.