Tokyo stocks shade up amid hopes for European banks

Tokyo stocks were marginally higher in early trade today after Wall Street staged a late rally amid hopes that EU leaders would act to aid weak banks.

The Nikkei index at the Tokyo Stock Exchange opened up 0.42% but narrowed the gain to 0.08% or 7.17 points to 8,463.29 in the first 15 minutes of trading.

The euro was trading at USD 1.3292 in early Asian trade, down from USD 1.3338 in New York yesterday.

Against the Japanese currency the euro edged down to 102.05 yen from 102.14 in New York, where the common European currency fell to 100.76 yen, the lowest level since 2001.

The dollar was at 76.77 yen against 76.82 yen in New York.

On Wall Street yesterday the Dow Jones Industrial Average rocketed in the final minutes to end up 1.44% at 10,808.71 on a Financial Times report that European Union ministers were studying plans to help vulnerable banks.

France and Belgium stepped in Tuesday to guarantee the financing of troubled cross-border bank Dexia as its shares plunged spectacularly ahead of confirmation that it is to be broken up.

The two states, shareholders in a bank that specialises in investing in local government funds, acted as Dexia faced the threat of becoming the first major European institution to fall victim to the eurozone debt crisis.