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Tokyo: Nikkei index falls 0.38% ahead of EU meet on Greece


[TOKYO] Tokyo's benchmark index closed 0.38 per cent lower Friday, giving up early gains despite a rally in Chinese shares as investors retreated to the sidelines ahead of a make-or-break European summit on Greece.

The Nikkei 225 at the Tokyo Stock Exchange lost 75.67 points to end at 19,779.83, while the Topix index of all first-section shares rose 0.23 per cent, or 3.66 points, to 1,583.55.

Tokyo was in the black at midday on a positive lead from Wall Street and a stronger yen, a plus for Japanese exporters.

But the market lost steam by the close as investors brace for a crucial European Union summit at the weekend.

"It's the weekend and it is still uncertain how the Greece situation will unfold," said Hirokazu Kabeya, senior strategist at Daiwa Securities.

But the Nikkei's losses were limited as a rally in Chinese shares - following a month long dive - gave "markets a sense of relief, for now", he added.

Greece late Thursday laid out details of a new bailout plan to save it from financial collapse, offering a pensions overhaul and tax hikes in return for debt relief and a rescue loan from the eurozone.

Eurozone officials will now study the details of the plan before a full European Union summit on Sunday that could determine whether Greece remains in the currency club.

Chinese stocks surged for a second day on Friday as a government rescue plan offered a respite from a month-long rout.

However, trading in more than 1,300 shares remained suspended, Bloomberg News reported, which tends to slow market activity and defer risk until later.

"China has managed to stop its decline for now using all sorts of government tools. But once trading resumes in shares that had stopped trading, we'll see more selling," Mizuho Securities analyst Yutaka Miura told Bloomberg News.

In Tokyo, Sony shares rose 0.63 percent to 3,420 yen, Toyota was up 0.34 per cent to finish at 7,925 yen and bank Mitsubishi UFJ jumped 2.27 per cent to 857.3 yen.

But market heavyweight Fast Retailing tumbled 6.00 per cent to 54,010 yen after a company executive warned that mild summer temperatures in Japan and losses at its Uniqlo stores in the US were weighing on its performance.

In currency trading, the dollar rose to 121.96 yen from 121.34 yen in New York, while the euro fetched US$1.1122 and 135.67 yen, compared with US$1.1035 and 133.88 yen.

On Wall Street, the Dow advanced 0.19 per cent, the S&P 500 rose 0.23 per cent and the Nasdaq gained 0.26 per cent.