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Asian markets climb as EU moves to defend euro

May 10, 2010 09:07 am | Updated November 17, 2021 07:13 am IST - TOKYO

Money traders at work on the Tokyo Foreign Exchange in Tokyo. File photo: AP.

” Asian stock markets climbed on Monday as the European Union agreed on a nearly $1 trillion defense package for the embattled euro, hoping to contain global fallout from Greece’s debt problems and protect its common currency.

Japan’s Nikkei 225 stock average rose 1.3 percent to 10,499.25, and Hong Kong’s Hang Seng index jumped 1.4 percent to 20,195.04. Other major benchmarks in the region advanced as relieved investors began buying after big declines last week.

The euro traded at $1.2920, up from the 14—month low of $1.2523 it hit late last week while stock futures suggested Wall Street would welcome the euro defence plan. Dow futures climbed 215 points, or 2.1 percent, to 10,550 and S&P futures jumped 28.4, or 2.6 percent, to 1,135.40. Nasdaq futures added 47.5, or 2.6 percent, to 1,896.

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Under the three—year plan, the EU Commission will make euro60 billion ($75 billion) available while countries from the 16—nation eurozone would promise bilateral backing for euro440 billion ($570 billion). The IMF would contribute an additional sum of at least half of the EU’s total contribution, or euro250 billion, Spanish Finance Minister Elena Salgado said.

The Federal Reserve followed by opening a programme to ship U.S. dollars to Europe in a move to head off a broader financial crisis on the continent.

Other central banks, including the Bank of Canada, the Bank of England, the European Central Bank and the Swiss National Bank, are also involved in the effort. The Bank of Japan is also considering a similar programme.

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Early Saturday, the eurozone leaders gave final approval for an euro80 billion ($100 billion) rescue package of loans to Greece for the next three years to keep it from imploding. The International Monetary Fund also approved its part of the rescue package “euro30 billion ($40 billion) worth of loans” in Washington on Sunday.

Together, the IMF and EU bailouts give Greece enough money to avoid having to raise private funds for two years, IMF officials said.

In New York on Friday, the Dow Jones industrials closed down 1.3 percent, at 10,380.43.

The dollar fell to 91.95 yen from 92.37 yen late Friday.

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