Asian shares rise on European debt talks

HONG KONG: Asian shares rose Monday after weekend meetings of European leaders resulted in "good progress" on tackling a regional debt crisis that has threatened to plunge the world economy into recession.

The eurozone wants to beef up its 440-billion-euro ($610 billion) rescue fund, the European Financial Stability Facility, to convince markets it has the means to protect highly indebted nations such as Italy and Greece.

However, they announced few concrete details from the weekend meetings, vowing to reveal all at a second summit on Wednesday.

Investors were also keeping an eye on the yen, which reached a record post-war high of 75.78 against the dollar on Friday, before the greenback regained some ground to 76.31 yen in early trade Monday.

The surge prompted Japan's finance minister to call for "decisive steps" to tame the currency's rapid rise amid worries that a strong yen will hammer Japanese exports.

Tokyo shares gained 1.38 percent, Sydney rose 2.0 percent, Seoul jumped 2.19 percent and Hong Kong climbed 2.68 percent. Shanghai added 0.23 percent in morning trade.

Eurozone talks have been mired in debate over how to increase the rescue fund's firepower without increasing the guarantees each state puts into the fund -- a sensitive issue for richer nations such as Germany, which are tired of bailing out the eurozone's weaker members.

One option, according to EU sources, would see the EFSF act as an insurer on part of the debt issued by countries deemed at risk in order to keep investors interested in their bonds. Germany appears to have convinced France to drop its opposition to this idea.

The second option calls for the creation of a second fund attached to the EFSF to garner contributions from nations outside the EU. This is where eurozone leaders disagree. (AFP)