* TSE not opposed to Singapore takeover of ASX
* SGX claims deal will boost EPS by 20 pct, TSE says
* TSE CEO predicts more bourse mergers in Asia
* TSE looking for alliances outside Asia (Adds comment, detail)
TOKYO, Nov. 4 (Reuters) - The Tokyo Stock Exchange will not oppose a plan by the Singapore Exchange, in which it holds a 5 percent stake, to take over Australia's ASX Ltd, the TSE's CEO said, bolstering the plan to create Asia's fourth-largest stock market.
The deal will likely spur other mergers in the region, Atsushi Saito told Reuters in an interview, predicting a future grouping made up of Chinese-speaking exchanges in Hong Kong, Shenzen, Taipei and Shanghai.
Asia has "an independent culture, quite different clients, so it hasn't been easy to do M&A. That was the general feeling. So my response to that very brave challenge by my friend at the SGX is that it is one of the leading signs that might be the way in Asia", Saito told Reuters.
The TSE is, however, looking to form alliances with bourses outside the Asian time zone, he added, and is considering ventures including agreements to cross-list the top 200 companies with partner exchanges.
"I'm not keen to make a deal in the same time zone, that doesn't make much sense to me. But if when we are sleeping someone can be very active on Japanese stocks or vice versa that would be nice," said Saito
While concerned that the SGX deal would dilute the TSE's shareholding, Saito said the proposed marriage with the Sydney-based exchange made sense.
Officials from the Singapore exchange convinced Saito by saying the deal would result in a 20 percent jump in earnings per share on the TSE's holding, which would be diluted to 3.1 percent, Saito said.
Saito's support could help SGX counter opposition to the deal in Australia.
Australia's Green Party, with an influential bloc in the upper house, has expressed concern about the $7.9 billion merger, while the main opposition conservative group has raised questions in parliament about the damage it might do to efforts to make the country a major regional financial centre.
Separately, Saito said the TSE may use its Tokyo AIM market, a joint venture with the London Stock Exchange, as a market to trade corporate debt.
It hoped the AIM market, opened in January 2009, would attract ventures in Japan and overseas to list with easier disclosure rules and by allowing companies to submit documents in English. It has so far failed to attract any initial offerings. (Reporting by Tim Kelly; Editing by Edmund Klamann and Michael Watson)