TOKYO: Tokyo stocks closed higher Monday, with investors cheered by signs of a breakthrough in US debt ceiling negotiations to avert a damaging default.

The benchmark Nikkei 225 index added 1.03 percent, or 317.23 points, to 31,233.54, while the broader Topix index ended up 0.69 percent, or 14.81 points, at 2,160.65.

President Joe Biden and Republican leader Kevin McCarthy said Sunday that a final bipartisan deal to raise the US debt ceiling would go to Congress.

The compromise after weeks of intense talks offers a path back from the precipice, even with the clock still ticking down to the June 5 “X-date” when the Treasury estimates there might not be enough cash to pay bills and debts.

“Following progress in the issue of the US government debt ceiling, risk-on sentiment strengthened further, prompting purchases in a wide range of sectors,” IwaiCosmo Securities said.

The dollar stood at 140.33 yen in late Tokyo trade, from around 140.90 yen in the morning, after changing hands at 140.59 yen in New York on Friday.