Nikkei hits 4-week high

The Japanese Nikkei has peaked at a four-week high today (December 7th) after investors warmed to the notion that European leaders can get the region's financial problems in check.

It follows the announcement by French president Nicolas Sarkozy and German chancellor Angela Merkel that the largest members of the EU will do all they can to make the region more stable in the coming months.

"Policy-makers have been making progress recently and the market thinks the European Central Bank and euro-zone countries will work together on the crisis," Hideyuki Ishiguro, assistant manager of investment strategy at Okasan Securities, told Reuters.

The benchmark index rose by 1.7 per cent to stand at 8,722.17, while the broader Topix index was up 1.6 per cent to 749.63.

This latest development follows a slump on the Nikkei yesterday following an announcement by Standard & Poor that 15 eurozone countries could face downgrading in the coming weeks if action over the ongoing financial crisis is not forthcoming.