Tokyo stocks bounced back on Monday with the benchmark index up 1.57 percent as investors await developments in last-ditch talks aimed at hammering out a new bailout deal for Greece. The Nikkei 225 index at the Tokyo Stock Exchange - which dropped 3.70 percent last week - added 309.94 points to 20,089.77, while the broader Topix index of all first-section shares rose 1.89 percent, or 29.96 points, to 1,613.51.
Investors were taking a wait-and-see approach as uncertainty swirled around a summit aimed at hammering out a debt agreement for Greece. Greek banks are set to run out of cash within days unless they receive a new injection, but the price for that three-year, 86 billion euro bailout is an unpalatable raft of reforms that hard-line Germany is demanding. In the latest developments, a European source told AFP early Monday that the leaders of Greece, Germany, France and the EU proposed a "compromise" on a bailout deal for Athens at late-night talks.
"There is a four-way deal which will now be put to the 19," said the source, who spoke on condition of anonymity. But a Greek government official said there were still issues to resolve on the proposal for far-reaching economic reforms by Athens in exchange for a third financial rescue programme since 2010. "Optimism about a deal is still dominant in the markets, although there are still various risk factors involving Greece that investors are keeping their eye on," said Hiroaki Hiwata, analyst Toyo Securities.
"Also the fact that the Chinese market has somewhat stabilised is feeding some relief," he added. Fears over a Chinese rout subsided as Shanghai stocks jumped 2.79 percent in afternoon trading after surging Friday in response to Chinese authorities beefing up measures to staunch a sell-off that has wiped trillions off mainland markets. On forex markets, the euro pared early losses to trade at $1.1135, slightly off $1.1149 in New York late Friday. In earlier electronic trading Monday, the euro fell as low as $1.1089.
The unit was little changed at 136.52 yen against 136.86 yen in US trade, while the dollar drifted lower to 122.60 yen from 122.77 yen. In share trading, Toyota jumped 2.37 percent to 8,113 yen while Uniqlo clothing chain operator Fast Retailing climbed 0.96 percent to 54,530 yen. After falling in earlier trade, Nintendo gained 1.48 percent to close at 19,805 yen. The see-saw moves came after the videogame giant said its chief executive Satoru Iwata had died of cancer at the age of 55, just months after he abandoned a consoles-only policy and launched a push into the booming smartphone games market.