Asian shares rose Wednesday as the US Congress looked set to back a deal to avert a "fiscal cliff" of drastic tax rises and spending cuts in an upbeat start to the year for regional markets.
With the House of Representatives set to vote on the pact, which has already passed the Senate, the dollar slipped against the euro as risk appetite returned to markets.
Hong Kong was up 1.89 percent, Seoul rose 1.40 percent, and Sydney put on 1.26 percent. Financial markets in Japan and China were closed for a public holiday.
The gains followed sharp jumps in US stocks on New Year's Eve as Congress moved towards a deal.
The Dow Jones Industrial Average finished up 1.28 percent, the S&P 500 gained 1.69 percent and the tech-rich Nasdaq Composite surged 2.00 percent.
Analysts however noted that the reaction in Asia was muted after the protracted wrangling in the United States and that the decision to put off spending cuts had potentially set up another political fight.
"There hasn't been a tremendous market reaction and I think that people are looking at all the politics that is going on," Matthew Sherwood, head of investment market research at Perpetual Investments in Sydney, told Dow Jones Newswires.
Nevertheless, the upbeat start for shares will be a relief for investors after the uncertainty that clouded markets in the final months of 2012 as wrangling over the fiscal cliff dragged on.
In Washington, the House of Representatives was set to vote on the bid to raise taxes on the rich and put off a $109-billion dollar programme of spending cuts for two months, after a conservative rebellion fizzled out.
The deal passed the Senate early on Tuesday, but its fate hung in the balance for hours as House conservatives sought to amend it to include big spending cuts, which would likely have killed its chance of passage.
Had the deal splintered, all Americans would have been hit by tax increases and the spending cuts would have kicked in across the government, in a combined $500 billion shock that could have rocked the fragile recovery.
A majority of 217 votes was seen as a certainty given that President Barack Obama's Democrats were certain to back the pact along with some of the Republican majority.
On currency markets, the euro strengthened to $1.3262 in morning Asian trade from $1.3192 on Monday. The euro was at 115.28 yen from 114.45 yen. The dollar rose to 86.95 yen from 86.69 yen.
On oil markets, New York's main contract, light sweet crude for delivery in February, added 19 cents to $92.01 a barrel and Brent North Sea crude for February delivery gained 42 cents to $111.53.
Gold was at $1,676.50 at 0310 GMT compared with $1,658.90 late Friday.