Japan’s Nikkei share average rebounded on Monday after a sharp fall at the end of last week, as Cyprus and the European Union agreed to a plan to resolve the island’s financial crisis.

The Nikkei advanced 1.4 per cent to 12,506.94 after dropping 2.4 per cent in the previous session.

“Euro-related companies have a pretty good performance so far,” a Tokyo-based trader said.

“Our house view on Cyprus is that it will be difficult but it will be solved. The big picture is looking quite good, especially for Japan.”