diff --git a/Lib/_dummy_os.py b/Lib/_dummy_os.py
index 5bd5ec0a1..38e287af6 100644
--- a/Lib/_dummy_os.py
+++ b/Lib/_dummy_os.py
@@ -5,22 +5,30 @@ A shim of the os module containing only simple path-related utilities
 try:
     from os import *
 except ImportError:
-    import abc
+    import abc, sys
 
     def __getattr__(name):
-        raise OSError("no os specific module found")
+        if name in {"_path_normpath", "__path__"}:
+            raise AttributeError(name)
+        if name.isupper():
+            return 0
+        def dummy(*args, **kwargs):
+            import io
+            return io.UnsupportedOperation(f"{name}: no os specific module found")
+        dummy.__name__ = f"dummy_{name}"
+        return dummy
 
-    def _shim():
-        import _dummy_os, sys
-        sys.modules['os'] = _dummy_os
-        sys.modules['os.path'] = _dummy_os.path
+    sys.modules['os'] = sys.modules['posix'] = sys.modules[__name__]
 
     import posixpath as path
-    import sys
     sys.modules['os.path'] = path
     del sys
 
     sep = path.sep
+    supports_dir_fd = set()
+    supports_effective_ids = set()
+    supports_fd = set()
+    supports_follow_symlinks = set()
 
 
     def fspath(path):
diff --git a/Lib/io.py b/Lib/io.py
index 7362ae305..c2812876d 100644
--- a/Lib/io.py
+++ b/Lib/io.py
@@ -55,10 +55,15 @@ import _io
 import abc
 
 from _io import (DEFAULT_BUFFER_SIZE, BlockingIOError, UnsupportedOperation,
-                 open, open_code, FileIO, BytesIO, StringIO, BufferedReader,
+                 open, open_code, BytesIO, StringIO, BufferedReader,
                  BufferedWriter, BufferedRWPair, BufferedRandom,
                  IncrementalNewlineDecoder, text_encoding, TextIOWrapper)
 
+try:
+    from _io import FileIO
+except ImportError:
+    pass
+
 # Pretend this exception was created here.
 UnsupportedOperation.__module__ = "io"
 
@@ -82,7 +87,10 @@ class BufferedIOBase(_io._BufferedIOBase, IOBase):
 class TextIOBase(_io._TextIOBase, IOBase):
     __doc__ = _io._TextIOBase.__doc__
 
-RawIOBase.register(FileIO)
+try:
+    RawIOBase.register(FileIO)
+except NameError:
+    pass
 
 for klass in (BytesIO, BufferedReader, BufferedWriter, BufferedRandom,
               BufferedRWPair):
diff --git a/wasm/demo/package.json b/wasm/demo/package.json
index c87513250..53ed264ea 100644
--- a/wasm/demo/package.json
+++ b/wasm/demo/package.json
@@ -4,24 +4,25 @@
     "description": "Bindings to the RustPython library for WebAssembly",
     "main": "index.js",
     "dependencies": {
-        "codemirror": "^5.42.0",
-        "local-echo": "^0.2.0",
-        "xterm": "^3.8.0"
+        "@codemirror/lang-python": "^6.1.6",
+        "@xterm/addon-fit": "^0.10.0",
+        "@xterm/xterm": "^5.3.0",
+        "codemirror": "^6.0.1",
+        "upgrade": "^1.1.0",
+        "xterm-readline": "^1.1.2"
     },
     "devDependencies": {
-        "@wasm-tool/wasm-pack-plugin": "^1.1.0",
-        "clean-webpack-plugin": "^3.0.0",
-        "css-loader": "^3.4.1",
-        "html-webpack-plugin": "^3.2.0",
-        "mini-css-extract-plugin": "^0.9.0",
-        "raw-loader": "^4.0.0",
-        "serve": "^11.0.2",
-        "webpack": "^4.16.3",
-        "webpack-cli": "^3.1.0",
-        "webpack-dev-server": "^3.1.5"
+        "@wasm-tool/wasm-pack-plugin": "^1.7.0",
+        "css-loader": "^7.1.2",
+        "html-webpack-plugin": "^5.6.3",
+        "mini-css-extract-plugin": "^2.9.2",
+        "serve": "^14.2.4",
+        "webpack": "^5.97.1",
+        "webpack-cli": "^6.0.1",
+        "webpack-dev-server": "^5.2.0"
     },
     "scripts": {
-        "dev": "webpack-dev-server -d",
+        "dev": "webpack serve",
         "build": "webpack",
         "dist": "webpack --mode production",
         "test": "webpack --mode production && cd ../tests && pytest"
diff --git a/wasm/demo/snippets/import_pypi.py b/wasm/demo/snippets/import_pypi.py
index cbe837cd0..a7c8a8e7f 100644
--- a/wasm/demo/snippets/import_pypi.py
+++ b/wasm/demo/snippets/import_pypi.py
@@ -1,13 +1,12 @@
-import asyncweb
-import whlimport
-
-whlimport.setup()
-
 # make sys.modules['os'] a dumb version of the os module, which has posixpath
 # available as os.path as well as a few other utilities, but will raise an
 # OSError for anything that actually requires an OS
 import _dummy_os
-_dummy_os._shim()
+
+import asyncweb
+import whlimport
+
+whlimport.setup()
 
 @asyncweb.main
 async def main():
diff --git a/wasm/demo/src/browser_module.rs b/wasm/demo/src/browser_module.rs
deleted file mode 100644
index e69de29bb..000000000
diff --git a/wasm/demo/src/index.ejs b/wasm/demo/src/index.ejs
index 02f2f52f5..d261b110e 100644
--- a/wasm/demo/src/index.ejs
+++ b/wasm/demo/src/index.ejs
@@ -14,7 +14,6 @@
             browser's devtools and play with <code>rp.pyEval('1 + 1')</code>
         </p>
         <div id="code-wrapper">
-            <textarea id="code"><%= defaultSnippet %></textarea>
             <select id="snippets">
                 <% for (const name of snippets) { %>
                     <option
@@ -77,7 +76,7 @@
         <a href="https://github.com/RustPython/RustPython">
             <img
                 style="position: absolute; top: 0; right: 0; border: 0;"
-                src="https://s3.amazonaws.com/github/ribbons/forkme_right_green_007200.png"
+                src="https://github.blog/wp-content/uploads/2008/12/forkme_right_green_007200.png"
                 alt="Fork me on GitHub"
             />
         </a>
diff --git a/wasm/demo/src/index.js b/wasm/demo/src/index.js
index aa1619eb2..db3554c48 100644
--- a/wasm/demo/src/index.js
+++ b/wasm/demo/src/index.js
@@ -1,11 +1,13 @@
 import './style.css';
-import 'xterm/lib/xterm.css';
-import CodeMirror from 'codemirror';
-import 'codemirror/mode/python/python';
-import 'codemirror/addon/comment/comment';
-import 'codemirror/lib/codemirror.css';
-import { Terminal } from 'xterm';
-import LocalEchoController from 'local-echo';
+import '@xterm/xterm/css/xterm.css';
+import { EditorView, basicSetup } from 'codemirror';
+import { keymap } from '@codemirror/view';
+import { indentUnit } from '@codemirror/language';
+import { indentWithTab } from '@codemirror/commands';
+import { python } from '@codemirror/lang-python';
+import { Terminal } from '@xterm/xterm';
+import { FitAddon } from '@xterm/addon-fit';
+import { Readline } from 'xterm-readline';
 
 let rp;
 
@@ -22,23 +24,24 @@ import('rustpython')
         document.getElementById('error').textContent = e;
     });
 
-const editor = CodeMirror.fromTextArea(document.getElementById('code'), {
-    extraKeys: {
-        'Ctrl-Enter': runCodeFromTextarea,
-        'Cmd-Enter': runCodeFromTextarea,
-        'Shift-Tab': 'indentLess',
-        'Ctrl-/': 'toggleComment',
-        'Cmd-/': 'toggleComment',
-        Tab: (editor) => {
-            var spaces = Array(editor.getOption('indentUnit') + 1).join(' ');
-            editor.replaceSelection(spaces);
-        },
-    },
-    lineNumbers: true,
-    mode: 'text/x-python',
-    indentUnit: 4,
-    autofocus: true,
+const fixedHeightEditor = EditorView.theme({
+    '&': { height: '100%' },
+    '.cm-scroller': { overflow: 'auto' },
 });
+const editor = new EditorView({
+    parent: document.getElementById('code-wrapper'),
+    extensions: [
+        basicSetup,
+        python(),
+        keymap.of(
+            { key: 'Ctrl-Enter', mac: 'Cmd-Enter', run: runCodeFromTextarea },
+            indentWithTab,
+        ),
+        indentUnit.of('    '),
+        fixedHeightEditor,
+    ],
+});
+editor.focus();
 
 const consoleElement = document.getElementById('console');
 const errorElement = document.getElementById('error');
@@ -48,7 +51,7 @@ function runCodeFromTextarea() {
     consoleElement.value = '';
     errorElement.textContent = '';
 
-    const code = editor.getValue();
+    const code = editor.state.doc.toString();
     try {
         rp.pyExec(code, {
             stdout: (output) => {
@@ -78,18 +81,25 @@ function updateSnippet() {
     // the require here creates a webpack context; it's fine to use it
     // dynamically.
     // https://webpack.js.org/guides/dependency-management/
-    const { default: snippet } = require(
-        `raw-loader!../snippets/${selected}.py`,
-    );
+    const snippet = require(`../snippets/${selected}.py?raw`);
 
-    editor.setValue(snippet);
-    runCodeFromTextarea();
+    editor.dispatch({
+        changes: { from: 0, to: editor.state.doc.length, insert: snippet },
+    });
 }
+function updateSnippetAndRun() {
+    updateSnippet();
+    requestAnimationFrame(runCodeFromTextarea);
+}
+updateSnippet();
 
 const term = new Terminal();
+const readline = new Readline();
+const fitAddon = new FitAddon();
+term.loadAddon(readline);
+term.loadAddon(fitAddon);
 term.open(document.getElementById('terminal'));
-
-const localEcho = new LocalEchoController(term);
+fitAddon.fit();
 
 let terminalVM;
 
@@ -107,40 +117,33 @@ finally:
 }
 
 async function readPrompts() {
-    let continuing = false;
+    let continuing = '';
 
     while (true) {
-        const ps1 = getPrompt('ps1');
-        const ps2 = getPrompt('ps2');
-        let input;
+        let input = await readline.read(getPrompt(continuing ? 'ps2' : 'ps1'));
+        if (input.endsWith('\n')) input = input.slice(0, -1);
         if (continuing) {
-            const prom = localEcho.read(ps2, ps2);
-            localEcho._activePrompt.prompt = ps1;
-            localEcho._input = localEcho.history.entries.pop() + '\n';
-            localEcho._cursor = localEcho._input.length;
-            localEcho._active = true;
-            input = await prom;
-            if (!input.endsWith('\n')) continue;
-        } else {
-            input = await localEcho.read(ps1, ps2);
+            input = continuing += '\n' + input;
+            if (!continuing.endsWith('\n')) continue;
         }
         try {
+            console.log([input]);
             terminalVM.execSingle(input);
         } catch (err) {
             if (err.canContinue) {
-                continuing = true;
+                continuing = input;
                 continue;
             } else if (err instanceof WebAssembly.RuntimeError) {
                 err = window.__RUSTPYTHON_ERROR || err;
             }
-            localEcho.println(err);
+            readline.print('' + err);
         }
-        continuing = false;
+        continuing = '';
     }
 }
 
 function onReady() {
-    snippets.addEventListener('change', updateSnippet);
+    snippets.addEventListener('change', updateSnippetAndRun);
     document
         .getElementById('run-btn')
         .addEventListener('click', runCodeFromTextarea);
@@ -148,7 +151,7 @@ function onReady() {
     runCodeFromTextarea();
 
     terminalVM = rp.vmStore.init('term_vm');
-    terminalVM.setStdout((data) => localEcho.print(data));
+    terminalVM.setStdout((data) => readline.print(data));
     readPrompts().catch((err) => console.error(err));
 
     // so that the test knows that we're ready
diff --git a/wasm/demo/src/style.css b/wasm/demo/src/style.css
index 771894e49..f9892745a 100644
--- a/wasm/demo/src/style.css
+++ b/wasm/demo/src/style.css
@@ -3,7 +3,7 @@ textarea {
     resize: vertical;
 }
 
-#code,
+#code-wrapper,
 #console {
     height: 30vh;
     width: calc(100% - 3px);
diff --git a/wasm/demo/webpack.config.js b/wasm/demo/webpack.config.js
index e20b47724..75fb6786e 100644
--- a/wasm/demo/webpack.config.js
+++ b/wasm/demo/webpack.config.js
@@ -1,7 +1,6 @@
 const HtmlWebpackPlugin = require('html-webpack-plugin');
 const MiniCssExtractPlugin = require('mini-css-extract-plugin');
 const WasmPackPlugin = require('@wasm-tool/wasm-pack-plugin');
-const { CleanWebpackPlugin } = require('clean-webpack-plugin');
 
 const path = require('path');
 const fs = require('fs');
@@ -12,6 +11,7 @@ module.exports = (env = {}) => {
         output: {
             path: path.join(__dirname, 'dist'),
             filename: 'index.js',
+            clean: true,
         },
         mode: 'development',
         resolve: {
@@ -28,10 +28,17 @@ module.exports = (env = {}) => {
                     test: /\.css$/,
                     use: [MiniCssExtractPlugin.loader, 'css-loader'],
                 },
+                {
+                    resourceQuery: '?raw',
+                    type: 'asset/source',
+                },
+                {
+                    test: /\.wasm$/,
+                    type: 'webassembly/async',
+                },
             ],
         },
         plugins: [
-            new CleanWebpackPlugin(),
             new HtmlWebpackPlugin({
                 filename: 'index.html',
                 template: 'src/index.ejs',
@@ -51,6 +58,9 @@ module.exports = (env = {}) => {
                 filename: 'styles.css',
             }),
         ],
+        experiments: {
+            asyncWebAssembly: true,
+        },
     };
     if (!env.noWasmPack) {
         config.plugins.push(
diff --git a/wasm/lib/src/convert.rs b/wasm/lib/src/convert.rs
index 0618d9a37..0bf1d21c9 100644
--- a/wasm/lib/src/convert.rs
+++ b/wasm/lib/src/convert.rs
@@ -3,7 +3,7 @@
 use crate::js_module;
 use crate::vm_class::{stored_vm_from_wasm, WASMVirtualMachine};
 use js_sys::{Array, ArrayBuffer, Object, Promise, Reflect, SyntaxError, Uint8Array};
-use rustpython_parser::ParseErrorType;
+use rustpython_parser::{lexer::LexicalErrorType, ParseErrorType};
 use rustpython_vm::{
     builtins::PyBaseExceptionRef,
     compiler::{CompileError, CompileErrorType},
@@ -258,7 +258,15 @@ pub fn syntax_err(err: CompileError) -> SyntaxError {
         &"col".into(),
         &(err.location.unwrap().column.get()).into(),
     );
-    let can_continue = matches!(&err.error, CompileErrorType::Parse(ParseErrorType::Eof));
+    let can_continue = matches!(
+        &err.error,
+        CompileErrorType::Parse(
+            ParseErrorType::Eof
+                | ParseErrorType::Lexical(LexicalErrorType::Eof)
+                | ParseErrorType::Lexical(LexicalErrorType::IndentationError)
+                | ParseErrorType::UnrecognizedToken(rustpython_parser::Tok::Dedent, _)
+        )
+    );
     let _ = Reflect::set(&js_err, &"canContinue".into(), &can_continue.into());
     js_err
 }