HONG KONG - Asian markets rose in quiet pre-Christmas trade on Monday after big losses in the previous session as US lawmakers remain deadlocked in talks to avert the fiscal cliff.
The yen dipped against the euro and the dollar after Japan's incoming prime minister again called on the central bank to take further steps to ease monetary policy, warning he would change the law to make sure it followed his instructions.
With many markets open for just a half day Hong Kong closed 0.16 per cent higher, adding 34.89 points to 22,541.18, Sydney added 0.25 per cent, or 11.6 points to 4,635.2 and Seoul was flat, edging up 1.40 points to 1,981.82.
Shanghai was 0.27 per cent higher, adding 5.74 points to 2,159.05.
Tokyo, Manila and Jakarta were closed for public holidays.
Regional gains came despite losses on Wall Street Friday as Capitol Hill broke up for Christmas without an agreement to avoid the huge tax hikes and spending cuts due to take effect in just over a week.
If the $600 billion package comes into effect and a less painful budget to cut the nation's deficit is not agreed, economists say it will tip the United States into recession, which would have a knock-on effect for the world economy.
Investors were hit after House Speaker John Boehner late Thursday scrapped a vote on a bill that would have extended tax cuts for all Americans earning less than $1 million even if a wider deal could not be struck.
The move, which he described as his "Plan B", was dropped because he did not have enough support. He said his party would recess until after Christmas.
"The breakdown of what little progress there was in the US has hit markets hard... especially since Speaker John Boehner appears to have lost the support of part of his Republican party," said Chris Beauchamp, market analyst at IG Markets in Britain.