Asian markets rise as Cyprus deal eases crisis fears 25 March 2013 Last updated at 02:38 Continue reading the main story Asian markets opened higher after officials said a bailout deal for Cyprus had been agreed, easing fears of a collapse of its banking system. A failure to reach a deal may have seen the European Central Bank cut emergency funding to Cyprus's two biggest banks. The fears were that such a move may cause the Cypriot banking system to collapse and even prompt the country's exit from the eurozone. Shares in Japan, South Korea and Australia rose on the news of the deal. "The news was what markets were waiting for, some kind of an agreement," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo. Japan's Nikkei 225 index rose 1.3%, South Korea's Kospi gained 1.5% and Australia's ASX200 was up 0.7%. Broader gains The developments in Cyprus over the past few days had once again triggered fears that the eurozone crisis may be escalating. We might get a small relief rally if we do get one, but markets will then very quickly turn to the risk of a bank run and whether conditions for the aid will be implemented smoothly End Quote Greg Gibbs Royal Bank of Scotland The biggest fear was that Cyprus might have had to leave the eurozone, if a deal was not agreed upon in time. Many analysts had been concerned that Cyprus's exit from the bloc may cause a loss of confidence across the eurozone and prompt investors to withdraw from other troubled economies of the bloc, such as Greece. These concerns had seen investors ditch the euro over the past few days in favour of other assets seen as relatively safer. News of the Cyprus deal boosted the euro. The single currency gained 0.8% against the US dollar. It was trading at $1.3044 in early Asian trade. It rose 1.3% against the Japanese yen to trade at 123.81 yen. Uncertainties remain Cyprus had agreed a bailout deal worth 10bn euros ($13bn; £8.5bn) with the European Union (EU) and the International Monetary Fund (IMF) last week. However, the EU and IMF had asked Cyprus to raise 5.8bn euros in order to secure the funds. They had proposed that Cyprus impose a one-off levy on bank deposits in order to raise the cash, a move that triggered protests in Cyprus and resulted in savers rushing to ATM machines to withdraw their money - a move that brought fears of a run on the banks. The Cyprus parliament rejected the proposal last week, delaying an agreement to secure the bailout funds. However, reports suggest that the latest deal will include a levy on deposits of more than 100,000 euros in Cyprus' two biggest banks. The levy on accounts in Laiki Bank - the country's second-biggest - could be as high as 40%, correspondents say. An EU official told the BBC that under the draft agreement, Laiki Bank will be wound down with "a significant levy" affecting those with deposits of over 100,000 euros. Large deposits in the country's biggest bank, Bank of Cyprus, could also be hit by the levy, reports say. Analysts said that while the draft deal had helped ease market jitters, uncertainties surrounding its implementation were likely to hurt sentiment in the coming days. "We might get a small relief rally if we do get one, but markets will then very quickly turn to the risk of a bank run and whether conditions for the aid will be implemented smoothly," said Greg Gibbs, senior currency strategist at Royal Bank of Scotland.