With the Nikkei recently hitting five-year highs, the yen weak and Japan's economy showing signs of picking up, it's been a great time to buy Japanese stocks. The questions now, though, are just how much further the yen will deteriorate and for how long. The weaker yen is good for Japanese exports but it also heightens inflationary pressures, especially considering that Japan needs to import 80% of its energy needs. As oil is again flirting with $60 a barrel, the Nikkei 225 stock average fell 0.8% to 15,423.38 overnight. However, the Nikkei is still within a hair of 15,500, its best level in five years and one that it briefly surpassed on Monday. On Tuesday, the yen dropped to 121.04 against the dollar, a trend that's accelerated since the meeting of the Group of Seven industrialized nations revealed no global concern about the weaker Japanese currency. The dollar, meanwhile, was little changed against the euro, which traded at $1.1785 from $1.1787 the prior day. The greenback remains supported by recent strong economic data and expectations that the Federal Reserve will continue hiking rates. But news that U.S. productivity had improved while labor costs dropped in the third quarter somewhat tempered the views of an aggressive Fed. Equity markets made the most of the data. The Dow Jones Industrial Average was recently up 77.24 points, or 0.71%, to 10,912.25, and the S&P 500 was gaining 9.59 points, or 0.76%, at 1271.68. The The Nasdaq Composite was adding 18.01 points, or 0.80%, to 2275.65. Among the winning stocks, Apple ( AAPL) was rising 3.9% after UBS raised its fiscal 2006 earnings estimate for the company and lifted its price target on the stock to $86 from $74. Google ( GOOG) was gaining 1% after Pacific Crest Securities raised its price target to $500 from $400.