The euro gained for a third day against the dollar, stocks climbed and commodities rose after European governments unveiled a plan to halt Greece's fiscal crisis.
Europe's currency strengthened 1 per cent against the dollar to $1.3649 at 4pm in Tokyo and rose versus all 16 of its most-traded counterparts.
Euro-region finance ministers pledged as much as €45 billion in loans at below-market interest rates to help rescue debt-plagued Greece and restore confidence in the European currency, which weakened 4.8 per cent against the dollar this year. The bailout, combined with expectations of faster economic growth in India and South Korea, improved investor sentiment in Asia, where the MSCI Asia Pacific Index rose 0.2 per cent to 128.45.
"The development in Greece is giving market sentiment a boost because it eases concerns of a default among European nations facing debt problems," said Olan Caperina, a fund manager at Bank of the Philippine Islands, which manages $9.7 billion. "Investors have reasons to turn positive and put money into the markets."
Europe's currency rose 1.2 per cent to 127.37 yen and the Danish, Swedish, Swiss and Norwegian currencies led gains, all strengthening more than 0.7 per cent versus the yen.
Poland's zloty declined against the euro as the nation's president and central bank chief died in a weekend plane crash.
The EU and the International Monetary Fund pledged to provide three-year loans with a rate of about 5 per cent, compared with 6.98 per cent on Greek three-year securities.
Greek bonds may climb and the gains may cut the yield premium investors demand to hold Greek 10-year debt instead of benchmark German bunds.
"This is very positive," said David Keeble, head of fixed-income strategy at Credit Agricole Corporate and Investment Bank in London. "We have got some concrete numbers and that is just what the market wanted. I would be all over Greek bonds after this. The market will not get down to 5 per cent, but it will trade close to that. Maybe about 50 basis points above."
The European agreement, aimed at stopping Greece's financial distress from infecting the rest of the region, damped concerns about the viability of the euro, which was created in 1999. The pact also may remove an impediment to the global economic recovery now being led by Asian nations.
Bloomberg