Asian Shares Edge Up, Euro Gains After New Greek Proposals

Asian shares and the euro gained in early Asian trade on Friday after Greece offered new reform proposals to creditors, raising hopes of a cash-for-reform deal at a weekend summit of European leaders.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3 per cent, but still on track for a weekly loss over 4 per cent in a period marred by a savage correction in Chinese stock markets.

U.S. stock futures also rose, with S&P 500 mini futures jumping as high as 2061.75, up 1.0 per cent from late U.S. levels. They were last up 0.7 per cent.

But Japan's Nikkei stock index dropped 0.3 per cent, headed for a weekly loss of over 3 per cent.

The euro extended gains, adding 0.4 per cent to $1.1072, while the dollar gained 0.3 per cent against the safe-haven yen to 121.71 yen.

The euro surged 0.7 per cent to 134.81 yen, recovering from a six-week low of 133.30 yen plumbed on Wednesday.

New measures Greece offered included a tax hike on shipping companies and scrapping tax breaks for its islands, higher value added tax for restaurants and a firm timetable for privatisations.

The Greek government will ask for parliament's approval on Friday to negotiate on the text of "prior actions" that could form the basis of a cash-for-reforms deal with creditors, a government source said.

Germany, Athens biggest creditor, also made a small concession on Thursday by acknowledging that Greece will need some debt restructuring as part of the new programme to make its public finances viable in the medium-term.

Hopes on a deal for Greece is likely to support Asian shares, though volatility in Chinese shares will likely need to ease off further before many investors step up buying.

"U.S. futures are higher, but we are waiting to see if stocks in Shanghai continue to recover, and if the VIX comes off its highs, before we can say that risk sentiment has improved, even as the Greek news has raised hopes," said Junichi Ishikawa, market analyst at IG Securities in Tokyo.

Beijing's increasingly frantic attempts to stem a stock market rout were finally rewarded on Thursday as Chinese shares bounced around 6 per cent.

But investors are not sure if the worst is over in the short term, and the costs of heavy-handed state intervention in the stock market are likely to weigh on the market for a long time.

In commodities trading, crude oil futures were steady but remained on track for steep weekly losses. U.S. crude was trading up 0.2 per cent at $52.89 per barrel, more than 7 per cent below last Friday's close. Brent crude was slightly higher on the day at $58.63 a barrel, but still more than 2 per cent down for the week.