Japanese shares rose to a 15-year high on Tuesday, and other Asia markets posted gains, amid renewed optimism that Greece will avoid defaulting on its debt after “positive” crisis talks in Brussels on Monday.
Athens desperately needs fresh financing from international creditors to meet a 30 June deadline to repay a €1.6bn (US$1.8bn) IMF loan and avoid a possible default.
Mirroring gains in European markets after Monday’s talks, Japan’s Nikkei share average jumped 1.2% on Tuesday morning to 20,739.90, its highest level since April 2000.
The Nikkei could rise to its highest level since June 1997 if it trades above its 2000 peak of 20,833.21 later on Tuesday.
Elsewhere, MSCI’s index of Asia-Pacific shares outside Japan rose by 0.3%. In Australia, the benchmark S&P/ASX 200 was up 1.3%, and South Korea’s Kospi index by 1.2%.
The prospects for a breakthrough, after months of wrangling, rose after Donald Tusk, president of the European council, called Greece’s proposals “a positive step forward”.
Tusk added that Eurozone finance ministers could endorse cash in return for the proposed tax and pension reforms by Wednesday evening. The deal would then go before eurozone leaders for final approval the following morning.
Progress in Brussels prompted investors to buy back Japanese shares after three weeks of losses for the Nikkei.
“The majority of market participants are trading under the optimistic scenario that the Greek problems will be resolved,” said Masashi Oda, senior investment officer at Sumitomo Mitsui trust bank. “Foreigners are buying again.”
The euro fell slightly to $1.1335 as some analysts warned that the deal on the table in Brussels would not necessarily solve Greece’s debt woes.
“Although momentum appears to have turned positive, if there is no progress on negotiations for a program extension before the 30 June deadline, the ECB may have to increase haircuts on Greek assets, which could, in turn, precipitate the need for capital controls,” strategists at Barclays said.
This article was written by Justin McCurry in Fukuoka and agencies, for theguardian.com on Tuesday 23rd June 2015 04.50 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010