Tokyo - Tokyo stocks jumped 2.03 percent Tuesday as a weaker yen helped lift the market after the eurozone told Cyprus to revise a controversial proposal to tax bank deposits as part of a larger bailout deal.
The benchmark Nikkei 225 index added 247.60 points to 12,468.23, while the broader Topix index of all first-section shares was up 1.71 percent, or 17.55 points, at 1,045.89.
The Nikkei's rebound, driven by bargain hunting investors, followed its worst percentage loss in 10 months on Monday. The sell-off came on the back of the Cyprus bailout news.
“The move (bailout) on Cyprus should not be interpreted very negatively by the markets due to the fact that euro-area partners were able to deliver,” said Alain Bokobza, head of global asset allocation at Societe Generale.
The euro plummeted Monday as dealers were spooked by Nicosia's plan to impose a levy on all depositors in order to qualify for a 10 billion euro ($13 billion) bailout for Cyprus.
Savers with up to 100,000 euros would be taxed at 6.75 percent, while those with larger accounts would be forced to pay up to 9.9
The news fuelled fears the eurozone debt crisis could flare up again, while others fretted similar measures could be introduced in other troubled economies in the future.
However, Cyprus baulked at putting the bailout to a vote in parliament as the crippling terms sparked a public outcry, while the eurozone told lawmakers to drop the levy on the smaller savings, restoring some calm to markets.
In Tokyo afternoon forex trade, the euro fetched 123.81 yen, from 123.41 yen, while the dollar also strengthened to 95.59 yen from 95.23 yen.
On Monday in Asia the European unit plunged to as low as 121.76 yen, while the dollar sat at 94.36 yen.
In Tokyo stock trading, yen-sensitive exporters got a boost, with Sony surging 6.81 percent to 1,661 yen, Canon jumping 3.10
percent to 3,490 yen and Toyota climbing 1.85 percent to 4,940 yen.
Kirin inched up 0.06 percent to 1,453 yen after the brewer announced a share-buyback plan, while Sharp was flat at 307 yen after saying Monday that a capital injection deal with US-based Qualcomm had been delayed as the two sides hammer out details of the agreement. - Sapa-AFP