Tokyo stocks rose 1.26 percent Monday as Greece presented its creditors with new proposals to reform its bailout, fuelling hopes it will avert a default and a possible exit from the eurozone. The Nikkei 225 index at the Tokyo Stock Exchange added 253.95 points to 20,428.19 while the Topix index of all first-section issues was up 1.08 percent, or 17.60 points, at 1,648.61. The single currency rose ahead of a eurozone emergency summit in Brussels later Monday on the Greek crisis.
The unit was changing hands at $1.1392 and 139.82 yen in afternoon trade Monday, up from $1.1349 and 139.23 yen in New York late Friday. Athens at the weekend put new proposals to its European lenders, calling them "a definitive solution" to unlock bailout funds.
Markets seem to be reacting somewhat positively to the new Greek plan, said Shoji Hirakawa, chief equity strategist at Okasan Securities. "The fact that there's a new proposal on the table appears to be seen favourably," he told Bloomberg News. The clock is ticking on a June 30 deadline for Athens to work out a new deal and make debt payments.
However, even if Greece defaults, Junichi Makino, chief economist at Nikko SMBC Securities, said it was unlikely to trigger a European crisis like the one seen in 2011, as few banks hold significant Greek sovereign debts. "No matter how much the Greek economy worsens (after the exit), its impact on the global economy would be limited," he said in a report, adding a 10 percent contraction in Greek GDP would curb global GDP by just 0.03 percent. In Tokyo share trading, banks were higher with Mitsubishi UFJ Financial Group rising 3.37 percent to 889 yen and Mizuho Financial Group up 2.45 percent at 258.6 yen.