TOKYO: Tokyo stocks rose 0.94 percent Wednesday morning, tracking Wall Street's gains after embattled Italian Prime Minister Silvio Berlusconi announced he would resign once key economic reforms are adopted.
The Nikkei 225 index at the Tokyo Stock Exchange gained 80.94 points to 8,736.45 by the lunch break following robust gains on Wall Street on the news from Italy.
The Topix index of all first-section issues added 1.28 percent, or 9.48 points, to 747.51.
Scandal-hit camera maker Olympus remained under heavy selling pressure, suffering the daily limit loss of 150 yen, or 20 percent, to 584 yen in the wake of Tuesday's revelation of the company's loss cover-ups since the 1990s.
Analysts said the future of the 92-year old firm was now heavily clouded by the revelation and investors fear the company may face delisting.
Olympus on Tuesday admitted to hiding losses on securities investments dating back to the 1990s and said that it had used funds related to controversial acquisitions to help do so.
Concerns about Europe's sovereign debt crisis are receding somewhat following Berlusconi's announcement, Hiroichi Nishi, general manager at SMBC Nikko Securities, told Dow Jones Newswires.
Berlusconi said on Tuesday that he would step down once reforms aimed at calming market turmoil are adopted this month, as the country struggles to avoid becoming the next to succumb to the European sovereign debt crisis.
Stocks were also helped by Chinese data showing the nation's inflation slowed sharply in October, supporting expectations for China to loosen its monetary policy to support growth.
The Chinese consumer price index -- a key gauge of inflation -- rose 5.5 percent year-on-year.
But Yutaka Yoshii, a general manager at Mito Securities, cautioned: "Japanese corporate earnings are deteriorating and we've repeatedly seen conditions in Europe change."
Nomura Holdings rallied 7.34 percent to 263 yen as the brokerage denied any involvement in past acquisition activities by Olympus after losing nearly 15 percent the previous day on such concerns.
Improving sentiment over eurozone debt woes helped lift mainstay issues, with Toyota rising 1.71 percent to 2,546 yen and Sony advancing 2.30 percent to 1,377 yen.
The euro was flat at $1.3837 in Asian morning trade against $1.3836 in New York late Tuesday. The European common unit was also flat at 107.50 yen. The dollar edged down to 77.60 yen from 77.70 yen.
The Dow Jones Industrial Average climbed 0.84 percent on Tuesday to close at 12,170.18.
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