Japan’s Nikkei share average hit a new 15-year high on Monday after euro zone finance ministers reached a deal to extend heavily indebted Greece’s financial rescue by four months.

The Nikkei was up 0.9 per cent at 18,490.98 points by mid-morning after rising as high as 18,509.08 earlier, its strongest level since May 2000.

The agreement removed the immediate threat that Greece could run out of money next month and be forced out of the single currency area. The new leftist-led Athens government now can try to negotiate longer-term debt relief with official creditors.

“The debt deal is giving comfort to the market,’’ said Masashi Oda, chief investment officer at Sumitomo Mitsui Trust Bank, but added that investors’ risk appetite is mainly due to Japanese shares’ attractive valuations.

He said that the Greek problem itself has not been resolved completely, and it may take a while to settle. But since the market consensus has been that its exit from the euro zone should not have a major contagion risk to the region anyway, the impact from the Greek problem should be limited to the Japanese market.

“Investors buy Japanese stocks because their valuations are cheaper than its peers in advanced markets,’’ Oda said.

The Topix’s average price-earnings ratio stands at 15.55, while the P/E ration for the S&P 500 is at 19.64. Exporters rose, with Toyota Motor Corp rising 1.0 per cent and Nissan Motor Co gaining 1.7 per cent.

Outperforming the market was Itoham Foods, which gained as much as 5.2 per cent to a three-week high after raising its net profit outlook to ¥11 billion from ¥5.5 billion for the year ending March.

Bucking the strength, Takata Corp dropped more than 3 per cent after US regulators had on Friday slapped the company with a $14,000 daily fine for failing to fully cooperate with a probe of its faulty air bags.

The broader Topix gained 0.7 per cent to 1,511.00 and the JPX-Nikkei Index 400 advanced 0.8 per cent to 13,712.23.

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