TOKYO: Tokyo stocks jumped 2.02 percent on Tuesday morning as the yen weakened against the dollar and euro after the eurozone told Cyprus to rethink its controversial proposal to tax all bank deposits.
The benchmark Nikkei 225 index, which tumbled 2.71 percent Monday after the plan was unveiled at the weekend, rose 246.55 points to 12,467.18 by the break.
The Topix index of all first-section shares climbed 1.70 percent, or 17.52 points, to 1,045.86.
A rebound in the headline Nikkei was likely after logging its worst percentage loss in 10 months on Monday, dealers said.
"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.
An equity trading director at a foreign brokerage told Dow Jones Newswires: "Despite the recent volatility, stocks retain their vitality, and yesterday's selloff should provide a bargain-hunting opportunity."
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 percent.
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 morning forex trade, the euro fetched 124.05 yen, from 123.41 yen, while the dollar also strengthened to 95.71 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 up 4.88 percent at 1,631 yen, Canon jumping 2.51 percent to 3,470 yen and Toyota climbing 1.95 percent to 4,945 yen.
Kirin rose 0.96 percent to 1,466 yen after the brewer announced a share-buyback plan, while Sharp slipped 0.32 percent to 306 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.
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