Tokyo stocks up 0.86pc by noon

TOKYO: Tokyo shares rose 0.86 percent Friday morning as investors cheered a new European Union-IMF bailout deal for debt-ridden Greece, brokers said.

Banks and exporters rose on the second package for Greece and a firmer euro, which bought 113.08 yen in Tokyo midday trade against 112.23 yen a day earlier.

A weaker yen helps Japanese exporters make the most of repatriated overseas earnings.

The benchmark Nikkei index climbed 86.17 points to 10,096.56 by the lunch break after hitting the highest point since July 8. The Topix index of all first-section issues rose 0.68 percent, or 5.86 points, to 865.97.

Investors were relieved after European leaders announced they had agreed, together with the banks holding much of Greece's debt, on a new financing and restructuring package in a bid to bail Athens out.

The pact spurred sighs of relief in world markets, easing worries of a Greek contagion across the region and force big cracks in the entire eurozone.

"It's positive since a collapse of talks would have led to turmoil in global financial markets," Monex market analyst Toshiyki Kanayama told Dow Jones Newswires.

Kazuhiro Takahashi, general manager of investment strategy and research at Daiwa Securities, said conditions for banks had been clouded by the uncertainty over Greece.

"So today's package will provide at least temporary relief," he said.

Megabank shares soared with Sumitomo Mitsui Financial climbing 3.19 percent to 2,520 yen and Mitsubishi UFJ up 3.29 percent at 407 yen.

Utility companies were largely negative after opening higher Friday, led by profit-taking in Tokyo Electric Power (TEPCO).

TEPCO shares, which soared 15.9 percent on Thursday on reports of political progress over the utility's compensation for victims of the nuclear crisis caused by the March 11 quake, ended the morning down 2.71 percent at 574 yen.

"The sector sentiment is very fragile and easily swayed by TEPCO, as the future of nuclear power is still highly uncertain," said Kanayama of Monex said.

"The more electricity they sell, the more losses they will bleed because of the higher fuel costs" due to thermal power generation making up for nuclear power plant that have gone offline since the March disaster, he said.

Kansai Electric Power Co. halted a reactor for regular checkups early Friday in Fukui Prefecture, and is poised to similarly suspend another later in the day to leave only 16 of the nation's 54 reactors running, adding to its power supply problems.

Shares in Kansai Electric Power fell 1.18 percent to 1,421.

Copyright AFP (Agence France-Presse), 2011