TOKYO: Tokyo stocks rose 1.34 percent on Monday morning following a move by European Union leaders to back tighter budget policing in a desperate bid to save the debt-riddled eurozone.
The Nikkei 225 index at the Tokyo Stock Exchange gained 114.58 points to 8,651.04 by the lunch break. The Topix index of all first-section issues added 1.21 percent, or 8.90 points, to 747.02.
Market players reacted positively as European leaders took a first step towards fiscal integration at their talks last week, said Yumi Nishimura, senior market analyst at Daiwa Securities.
A total of 26 of the 27 EU states signalled their willingness to join a "new fiscal compact" to resolve the crisis threatening to break apart the monetary union.
But non-euro Britain resisted a Franco-German drive to enshrine new budget rules in a modified EU treaty.
"There had been concerns that even some eurozone nations may oppose a deal and discussions may stall, but at the end, they moved together," Nishimura said.
The focus was now on how Standard & Poor's would respond to the new pact.
The ratings agency last week put 15 eurozone countries on watch for possible debt downgrades, saying it would monitor the EU summit to see if the outcome was likely to restore confidence in the eurozone and its public debt.
The Nikkei may lose momentum as the summit revealed few definitive measures to stem the region's debt crisis, said Yoshihiro Okumura, general manager at Chibagin Asset Management.
"Few fundamental measures were taken, although the amount of funds to be provided to the International Monetary Fund was raised (at the talks)," he said.
EU leaders said they also planned to transfer 200 billion euros to the International Monetary Fund which could then come to the aid of debt-mired eurozone countries.
The eurozone has been struggling to boost its own rescue fund to one trillion euros from 440 billion euros.
Toyota Motor rose 0.49 percent to 2,649 yen despite cutting its net profit outlook for the year to March by more than half on Friday, which was seen by market participants as a conservative estimate.
Shares in scandal-hit Olympus were up 4.97 percent at 1,266 yen after a report in the Nikkei daily that auditors are expected to sign off on the camera and medical equipment maker's corrected financial statements.
The company said it was trying to publish its accounts by a Wednesday deadline to avoid being delisted from Tokyo's stock exchange.
Olympus shares have more than doubled in the past month as players bet that its shares will not be delisted, but they are still about half their value from before whistleblowing former chief executive Michael Woodford was ousted in October after revealing a massive cover up at the firm.
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