Tokyo stocks close 1.69 per cent higher TOKYO stocks have ended 1.69 per cent higher after Cyprus and eurozone officials struck a last-minute deal that will see the island qualify for a much-needed bailout. The benchmark Nikkei 225 index added 207.93 points to 12,546.46 on Monday, with a weaker yen also providing support. The Topix index of all first-section shares finished 0.84 per cent, or 8.72 points, higher at 1,047.29. Bargain hunters moved in following a big sell-off on Friday, with dealers encouraged by the Cyprus deal and a rebound on Wall Street that saw the Dow finish 0.63 per cent higher. "Market players were relieved with the news on the Cyprus deal, which sustained the Nikkei index," said Hirokazu Fujiki, strategist with Okasan Securities. "Bargain-hunting also helped boost shares following Friday's sizeable loss, which was also followed by gains in New York," Fujiki said. Final backing for the Cyprus rescue came after about 12 hours of talks among Nicosia, the European Union, European Central Bank, International Monetary Fund and eurozone leaders. The agreement involves breaking up the island's second largest lender Laiki (Popular Bank), while imposing a levy on deposits above 100,000 euros ($A125,100). Markets feared that failure to reach a deal would have seen the tiny Mediterranean country exit the 17-nation eurozone, with the fallout spreading to other troubled bloc members including Italy and Spain. On forex markets, the euro fetched $1.3038 and 123.61 yen, up from $1.2986 and 122.72 yen late Friday in New York. The dollar was stronger at 94.79 yen in Tokyo from 94.46 yen in New York. Okasan's Fujiki said Japanese shares were expected to be supported at least until the Bank of Japan holds its first monetary policy meeting under new leadership next month. "Expectations from the meeting are still high," Fujiki said. New governor Haruhiko Kuroda, a finance veteran who supports aggressive monetary easing, is to hold his first regular meeting with other monetary policy members on April 3-4. A trading director at a foreign brokerage told Dow Jones Newswires: "With the Easter holiday coming up, which coincides with the fiscal year end, however, trading volume is likely to start tailing off from today." In Tokyo, Sony was up 3.13 per cent to 1,712 yen and Toyota added 0.81 per cent to 4,920 yen, but Canon closed unchanged at 3,500 yen. Japan Airlines ended flat at 4,665 yen on a report in the leading Nikkei business daily that said the carrier was mulling the purchase of about 20 Airbus A350 jets to replace its Boeing 777 jets from 2017. ANA fell 0.95 per cent to 207 yen.