TOKYO: Tokyo stocks rose 0.55 percent Wednesday morning after a rally on Wall Street and despite continued speculation over plans to contain the eurozone debt crisis.
A slightly weaker euro versus the yen also buoyed sentiment.
The Nikkei index at the Tokyo Stock Exchange gained 47.92 points to 8,789.83 by the lunch break. The Topix index of all first-section issues was up 2.80 points or 0.37 percent at 754.04.
US stocks staged a late rally Tuesday after a British newspaper reported that France and Germany were ready to sharply boost the eurozone's rescue fund in a bid to address the public debt crisis.
The Dow Jones Industrial Average surged 180.05 points (1.58 percent) to finish at 11,577.05.
Citing unnamed European Union diplomats, The Guardian reported that the leaders of France and Germany, the eurozone's biggest economies, have agreed to boost the rescue fund to two trillion euros ($2.7 trillion).
Other reports said however that officials were still debating the scope of how to enhance the European Financial Stability Facility, which currently has a 440 billion euro lending capacity.
The euro fetched $1.3762 in Tokyo morning trade on Wednesday, slightly up from $1.3752 in New York late Tuesday. The euro edged down to 105.53 yen from 105.66, and the dollar eased to 76.69 yen from 76.81 yen.
Moody's became the latest agency to downgrade Spain's debt rating on Tuesday, warning that no "credible" resolution to the country's economic crisis had yet emerged.
Sentiment in the stock market was shored up by relatively steady US corporate earnings results.
But "broadly lowered risk tolerance" is failing to significantly boost trading volume, said Kazuhiro Takahashi, general manager of investment strategy and research at Daiwa Securities.
"In a thinly traded market, despite some improvement in external factors it's hard to feel too enthusiastic (about positive market moves)," he said.
Some technology shares rose after bellwether chip supplier Intel in New York reported record sales for the September quarter as it shrugged off worries about a softening PC market and benefited from strong notebook sales.
Softbank and KDDI, Japan's two carriers for Apple's iPhone 4S, fell after the California company's record-high September quarter profit still fell short of forecasts.
Softbank fell 2.42 percent to 2,415 yen and KDDI sank 1.43 percent to 550,000 yen.
Olympus shares, which lost 43 percent in the three days to Tuesday after the company ousted its first non-Japanese chief executive, lost another 3.17 percent Wednesday morning to 1,372 yen.
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