HONG KONG - Asian markets mostly rose Tuesday, taking a lead from Wall Street as dealers grow confident US lawmakers will reach an agreement to avert the fiscal cliff.
Continued weakness of the yen helped send Japanese shares surging for a second straight session as Shinzo Abe prepares to take over as prime minister, vowing to press a more aggressive policy of monetary easing.
Tokyo rose 0.96 per cent, or 94.13 points, to 9,923.01, Seoul was up 0.51 per cent, or 10.02 points, at 1,993.09, while Sydney added 0.48 per cent, or 21.8 points, to 4,595.2.
Shanghai ended up 0.10 per cent, or 2.12 points, at 2,162.46 while Hong Kong gave up earlier gains to end flat, dipping 18.88 points to 22,494.73.
Traders were reacting to news progress was finally being made in talks on a new deficit-cutting budget to replace the tax hikes and spending cuts due to come into effect at the start of January and which would likely tip the US economy into recession.
President Barack Obama hosted top Republican lawmaker John Boehner in the White House for 45 minutes Monday in the latest effort to avert going over the so-called fiscal cliff.
The meeting follows news that Boehner had changed his position on not allowing any more taxes, saying at the weekend that he would agree to some hikes for people earning more than US$1 million.
Although Obama has said he would only agree to rises on people earning more than US$250,000, analysts say the development shows the outline of a tentative deal is being formed.
Wall Street ended on a high, with the Dow closing up 0.76 per cent, the S&P 500 gaining 1.19 per cent and the Nasdaq adding 1.32 per cent.
Japanese shares continued to be supported by the falling yen, which helps the country's exporters, as dealers bet on fresh central bank moves to boost the economy.
The election of Abe and his Liberal Democratic Party on Sunday was widely expected and investors now expect the Band of Japan to unveil a further loosening of monetary policy at the end of its two-day meeting on Thursday.
Abe and central bank chief Masaaki Shirakawa held talks on Tuesday to discuss monetary policy.
In share trading, utility giant TEPCO, which runs the Fukushima plant at the centre of last year's nuclear crisis, surged 17.32 per cent on expectations the new government will shelve any short-term plans to ditch atomic power.
In afternoon Tokyo trade, the dollar bought 84.96 yen, up from 83.87 yen in New York on Monday, while the euro also edged higher to 110.49 yen, from 110.40 yen.
The European single currency fetched US$1.3165, against US$1.3161.
Oil prices were up. New York's main contract, light sweet crude for delivery in January rose 58 cents to US$87.74 a barrel in the afternoon and Brent North Sea crude for February delivery advanced 73 cents to US$108.33.
Gold was at US$1,701.20 at 0800 GMT compared with US$1,690.10 late Monday.
In other markets:
Taipei rose 0.16 per cent, or 12.46 points, to 7,643.74.
Hon Hai Precision added 1.38 per cent at Tw$88.4 while Taiwan Semiconductor Manufacturing Co was 0.31 per cent lower at Tw$96.7.
Manila rose 0.23 per cent, or 12.74 points, to 5,636.59.
Metropolitan Bank is off 0.9 per cent at 97.40 pesos and SM Investments added 1.6 per cent to 829 pesos, while Ayala Corp. added 1.01 per cent to 500 pesos and Philippine Long Distance Telephone put on 1.27 per cent to 2,558 pesos.
Wellington climbed 0.32 per cent, or 12.77 points, to 3,979.25.
Telecom Corp gained 4.4 per cent to NZ$2.255, Fletcher Building added 0.49 per cent to NZ$8.10 and The Warehouse slipped 1.01 per cent to NZ$2.95.