Asian markets mostly tracked Wall Street higher on Thursday as investors following US talks aimed at avoiding a fiscal cliff welcomed positive comments from both sides of the political divide.
Higher-yielding "riskier" currencies also rose on hopes of progress on a resolution over the package of tax hikes and spending cuts due on January 1 that will likely tip the US economy back into recession.
Tokyo added 0.99 percent, or 92.53 points, to 9,400.88, Sydney was 0.68 percent, or 30.4 points, higher at 4,477.7 and Seoul climbed 1.15 percent, or 22.07 points, to 1,934.85.
Hong Kong also rose 0.99 percent, picking up 213.91 points to 21,922.89 but Shanghai fell 0.51 percent, or 10.04 points, to 1,963.49, a near four-year low.
With the focus now almost entirely on Washington, House of Representatives speaker John Boehner said Wednesday he was optimistic of a deal between his Republicans and their bitter Democratic rivals.
Later in the day President Barack Obama also said he expected a solution would be found before Christmas.
"Our ultimate goal is an agreement that gets our long-term deficit under control in a way that is fair and balanced," Obama said.
"I believe that both parties can agree on a framework that does that in the coming weeks," he said. "In fact, my hope is to get this done before Christmas."
Treasury Secretary Timothy Geithner's office said he would meet members of Congress on Thursday to discuss "a balanced approach to reduce our deficit".
"They have a relatively tight deadline to sort this out. I think they will, because it is in nobody's interests to push the economy off the rails," said Joe Bracken, head of macro strategies at BT Investment Management in Sydney.
"You will have a lot of 'he said, she said' over the next few weeks, and markets will remain volatile," he told Dow Jones Newswires.
Wall Street was higher Wednesday. The Dow climbed 0.83 percent, the S&P 500 gained 0.79 percent and the Nasdaq added 0.81 percent.
The news came as relief to markets, which had been spooked by comments on Tuesday from Democratic Senate Majority Leader Harry Reid that "little progress" had been made in cross-party talks.
On forex markets investors sold the safe haven yen, which has been falling in recent weeks after the man who is widely expected to become prime minister following next month's polls said he would embark on aggressive monetary easing.
The euro was at $1.2966, compared with $1.2939 in New York late Wednesday, while it was also at 106.56 yen, from 106.14 yen.
The dollar bought 82.16 yen, from 82.03 yen.
Oil prices rose. New York's main contract, West Texas Intermediate for January delivery, was up 44 cents to $86.93 a barrel in the afternoon, and Brent North Sea crude for January climbed 30 cents to $109.81.
Gold was at $1,724.60 at 1030 GMT compared with $1,740.80 late Wednesday.
In other markets:
-- Taipei rose 0.92 percent, or 68.62 points, to 7,503.55.
HTC rose 1.17 percent to Tw$259.0, while TSMC was 0.63 percent higher at Tw$96.5.
-- Manila closed 0.12 percent higher, adding 6.73 points to 5,640.45.
SM Investment gained 4.09 percent to 877 pesos while BDO Unibank rose 0.49 percent to 71.45 pesos. Philippine Long Distance Telephone Co. was unchanged at 2,586 pesos.
-- Wellington ended 0.12 percent higher, adding 4.62 points to 4,016.77.
Sky Television rose 3.0 percent to NZ$5.22 and Tower advanced 2.6 percent to NZ$1.95.
-- Jakarta rose 0.33 percent, or 14.26 points, to 4,319.09.
Bank Permata rose 1.42 percent to 1,430 rupiah, Hero Supermarket gained 3.11 percent to 4,150 rupiah, while Indah Kiat Pulp & Paper fell 7.89 percent to 700 rupiah.
-- Bangkok added 0.74 percent, or 9.63 points, to 1,309.57.
Oil company PTT edged up 0.63 percent to 318.00 baht, while electricity firm EGCO lost 1.57 percent to 125.50 baht.
-- Singapore closed 1.13 percent, or 34.13 points, higher at 3,045.90.
Olam International was 4.0 percent higher at Sg$1.56 and SingTel rose 0.62 percent to Sg$3.27.
-- Kuala Lumpur ended flat, inching up 0.8 points to close at 1,607.32.
CIMB Group Holdings rose 0.3 percent to 7.48 ringgit, while UEM Land Holdings fell 1.4 percent to 2.09 ringgit.
-- Mumbai gained 1.75 percent, or 328.83 points, to 19,170.91 points.
Wind energy giant Suzlon Energy rose 8.8 percent to 18.55 while private bank ICICI Bank rose 4.9 percent to 1,081.75 rupees.