The Japanese Yen hit a four-and-a-half year low against the dollar on Friday. The U.S. dollar traded above 100 yen for the first time since October 2008. The Japanese Yen fell to 101.98 yen per dollar.

The collapse of the Yen triggered a sell-off in oil and gold, Reuters reported, after signs of strength in the U.S. labor market.

"...Despite signs of slower U.S. growth here in the second quarter, the U.S. labor market continues to improve," Marc Chandler, head of global currency strategy and Brown Brothers Harriman in New York.

The slump in the Japanese currency was initiated by this week's drop in U.S. jobless claims, which implies a rapidly improving employment market, Reuters reported.

The Nikkei 225 index in Tokyo jumped 2.9 percent to close at 14,607.54, its highest level since January 2008, after the dollar traded above 100 yen for the first time in more than four years, The Epoch Times reported. This lower currency could potentially make the Japan's exports cheaper. The dollar was last at 1.1 percent higher at 101.73 yen.

"The Nikkei continues to dazzle. ... Japanese stocks have now surged more than 40 percent so far in 2013," said Robert Kavcic, an analyst at BMO Capital Markets.

With the Japanese currency breaching the 100 level, analysts expect the yen to fall further. Some see the dollar rising to 105 yen this summer and to 110 by the end of the year, Reuters reported.

"In a way, this recent yen move could not have been more badly timed, coming as it does on the eve of the latest G-7 meeting, with further yen losses quite likely," said Michael Hewson, senior markets analyst at CMC Markets.

Recently, the yen has been under as Prime Minister Shinzo Abe's new government works to get the world's number 3 economy out of its two-decade stagnation.