Cyprus deal boosts Asian markets ASIAN markets have rallied after Cyprus and its international lenders struck a deal that will qualify the island for a bailout and avoid the collapse of its banking system. The euro also enjoyed a bump as investors bought on relief that European officials had come to a last-minute agreement they hope will draw a line under a crisis that sent shares tumbling last week. Tokyo climbed 1.69 per cent, or 207.93 points, to end at 12,546.46 and Seoul climbed 1.49 per cent, or 28.96 points, to 1,977.67, while Sydney added 0.46 per cent, or 22.9 points, to 4,990.2. Hong Kong added 0.61 per cent, or 135.85 points, to end at 22,251.15, but Shanghai closed flat, dipping 1.56 points to 2,326.72. Final backing for the rescue came about 12 hours into talks between Nicosia, the European Union, European Central Bank, International Monetary Fund and eurozone leaders, with Cypriot President Nicos Anastasiades saying he was "content." The agreement involves breaking up the island's second largest lender Laiki (Popular Bank), while deposits above 100,000 euros ($A124,900) in Bank of Cyprus, the island's main lender, will take a major "haircut." A government spokesman said 30 per cent would be trimmed from deposits. "It does appear that the near-term risks have been addressed by the European authorities," said Matthew Sherwood, head of investment market research at Perpetual in Sydney. "There was always the hope and expectation, even the knowledge, that Cyprus would have to swallow its medicine and do what the troika told them to do," he told Dow Jones Newswires. Leaders had been under pressure to reach a deal after the ECB warned it would cut off funding to the island's banks if nothing had been done by Monday, which would have led to their collapse and likely forced Cyprus out of the eurozone. While the new plan will be painful for depositors it is a major change from a proposal last week to hit all savings, including those of the poor, which sent shudders through global markets. The negotiations were aimed at unlocking a loans package of 10 billion euros that will help Cyprus service its debt obligations and avoid a devastating default. The news lifted the euro, which was changing hands at $1.29.98 and 123.01 yen in afternoon trade, up from $1.2986 and 122.72 yen late Friday in New York. The dollar rose to 94.64 yen from 94.46 yen. Oil prices rose, with New York's main contract, light sweet crude for delivery in May, adding 33 cents to $94.04 a barrel and Brent North Sea crude for May up 32 cents to $108.00. Gold was at $1,602.70 an ounce at 1045 GMT compared with $1,608.40 late on Friday.