Tokyo: Tokyo stocks opened 1.51 percent higher on Tuesday as the yen weakened against the dollar and euro after eurozone finance ministers told Cyprus to drop a controversial levy on smaller bank deposits. The Nikkei 225 index at the Tokyo Stock Exchange, which tumbled 2.71 percent on jitters over Cyprus banking woes Monday, was up 184.98 points to 12,405.61 at the start.
The Nikkei is likely to rebound somewhat Tuesday after logging its worst percentage loss in 10 months the previous day, as the dollar and the euro rose against the yen after the Tokyo market closed, brokers said. "The move (bank 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 after the proposed bailout for Cyprus, including a steep tax on bank depositors, revived concerns about the eurozone.
The European common currency sank to $1.2944 in early Asian trade Tuesday from $1.2957 in New York Monday afternoon. Against the yen, the euro was 123.41 yen, unchanged from New York Monday but sharply up from 122.31 yen in Tokyo Monday morning. The dollar was at 95.34 yen Tuesday morning, up from 95.23 yen in US trade Monday and 94.84 yen in Tokyo Monday morning.
The eurozone told Cyprus on Monday to ditch the part of a hugely controversial 5.8-billion-euro grab on savings that stung even the smallest of account holders in exchange for a 10-billion-euro sovereign bailout deal, according to a statement issued after a conference call. The statement came after Cyprus baulked at putting the EU bailout to a vote in parliament as the crippling terms sparked a public outcry and mounting talk of a rethink by eurozone creditors, even as the uncertainty forced a prolonged closure of the island's banks.
US stocks fell for a second straight day Monday with the Dow Jones Industrial Average finishing down 62.05 points or 0.43 percent at 14,452.06.