Tokyo stocks closed 0.46 percent higher Wednesday as investors largely discounted the widely expected Greek default. The benchmark Nikkei 225 index at the Tokyo Stock Exchange rose 93.59 points to end at 20,329.32, while the Topix index of all first-section issues was up 0.37 percent, or 6.01 points, at 1,636.41. Uncertainty over the Greek situation kept investors on the sidelines but a stronger than expected business confidence survey by the Bank of Japan helped underpin the market.
"The extreme wariness toward Greece does seem to be fading," Hiroichi Nishi, a manager at SMBC Nikko Securities, told Bloomberg News. "But until the referendum, it's like annoyingly having a tiny fishbone stuck in the back of your throat." Greek Prime Minister Alexis Tsipras plunged bailout talks into chaos as he announced a referendum for Sunday on whether to accept reform plans that he said would humiliate the country.
Masayuki Otani, market analyst at Securities Japan, said: "We still don't know if we will actually face the worst-case scenario of Greece's 'no' to austerity proposals in the referendum, its exit from the eurozone and then the euro's plunge and the yen's upsurge."
A strong yen is negative for Japanese exporters as it makes products costlier overseas and erodes their profits when repatriated. The euro held steady in afternoon trade, buying $1.1117 and 136.44 yen from $1.1139 and 136.38 yen in New York late Tuesday. The dollar was at 122.71 yen against 122.44 yen. Sony shares rose 0.30 percent to 3,472 yen a day after they plunged 8.25 percent on announcing a plan to raise $3.6 billion through stock and bond sales.
Exporters were lower as the yen remained strong, with Toyota falling 0.76 percent to 8,140 yen and Canon down 0.94 percent at 3,945 yen. Greece became the first developed country to default on its debt to the IMF, after missing a 1.5-billion-euro ($1.7-billion) payment. Athens has said it asked the IMF to extend the deadline for its payment, a move that would give it financial room to continue negotiations with official creditors. The Washington-based lender has not ruled on the request.