NEW YORK (Reuters) - The dollar surged on Friday, posting sharp gains against the safe-haven Japanese yen as stock markets recovered globally and investors cheered efforts by governments and policymakers to address the economic fallout from the coronavirus outbreak.

FILE PHOTO: Bundles of banknotes of U.S. Dollar are pictured at a currency exchange shop in Ciudad Juarez, Mexico January 15, 2018. REUTERS/Jose Luis Gonzalez

The dollar posted its largest daily percentage gain against the yen since April 2013.

The U.S. currency also benefited after President Donald Trump declared a U.S. national emergency over the quickly spreading coronavirus on Friday, opening the door to more federal aid to combat the disease.

The greenback extended gains against several currencies after a blowout in swap spreads on Thursday signaled that investors want dollars. While those spreads came in on Friday, the dollar held strong.

But market participants said signs of dollar funding stress persist and policymakers probably need to do more.

“Underlying concerns regarding the economic fallout from the coronavirus on credit markets broadly remain,” said Shaun Osborne, chief FX strategist, at Scotiabank in Toronto.

“It may be tempting to look for signs of a low in global stocks but with the underlying issue - the coronavirus - still unchecked, we think that is premature at this point,” he added.

He noted that the cost of raising U.S. dollar funds in the cross-currency euro swap market has widened again on Friday after narrowing the day before on the Federal Reserve’s announcement to inject more liquidity into the banking system.

Wider spreads in the cross currency basis swap market suggested increased signs of U.S. dollar shortage for corporates seeking funding.

In afternoon trading, the dollar gained 3.2% against the yen to 108.03 yen JPY=EBS.

Wells Fargo said it had further upgraded its forecast for the yen against the dollar as the risk of financial turmoil remains, saying that the greenback will fall below 100 yen.

“The rate cuts and other policy actions from global central banks have done little to quell market panic. That may be due to the fact that fiscal policymakers have generally been slow to act,” said Wells Fargo in a research note.

The dollar also rallied versus another safe haven, the Swiss franc, rising 0.6% to 0.9496 franc CHF=.

Against a basket of currencies, the dollar rose 1% to 98.467 =USD.

The euro nursed losses despite European Central Bank policymakers' efforts to reassure markets. European assets sold off on Thursday after investors were underwhelmed by the bank's stimulus measures. The euro was last down 0.7% at $1.1108 EUR=.

The ECB on Thursday announced a stimulus package that provides loans to banks with rates as low as -0.75% and increases bond purchases, but it did not join its counterparts in the United States and Britain by cutting rates.

The pound GBP=D3 also plunged 2.2% against the dollar to $1.2290.

The greenback’s rebound this week reflects its role as the world’s most liquid currency, which investors seek in times of stress.

The Fed meets next week and many analysts now expect the central bank to chop its own target policy rate, quite possibly to zero, and give markets new guidance about how it plans to combat the economic fallout from the coronavirus.