Asian markets were boosted Wednesday as US politicians look to be closing in on a deal to avert the fiscal cliff, while the euro added to gains in New York after Greece's debt rating was upgraded.
Tokyo shares surged 2.39 percent, a third straight rally, to break 10,000 for the first time in eight months ahead of an expected Bank of Japan announcement on monetary policy.
The Nikkei in Japan ended up 237.39 points, to 10,160.40 on the Tokyo Stock Exchange, while Sydney climbed 0.49 percent, or 22.6 points, to a 17-month high of 4,617.8.
Hong Kong climbed 0.57 percent, or 128.64 points, to 22,623.37, while Shanghai closed flat, dipping 0.22 points to 2,162.24.
Seoul was closed for presidential elections.
The main focus continues to be on the United States, where lawmakers are holding talks to avert the huge tax hikes and deep spending cuts slated to come into effect in two weeks.
Most economists expect the package to tip the US economy into recession if a new deal -- with less swingeing measures -- is not agreed in time.
However, there is growing confidence that progress is being made in the negotiations, with top Republican lawmaker John Boehner saying he is willing to see taxes rise for people on more than $1 million -- rather than his previous position of no rises at all.
President Barack Obama has also said he is willing to see rises for people on more than $400,000, rather than the $250,000 he previously wanted.
Adding to the upbeat sentiment was news out of Europe that Standard & Poor's raised Greece's sovereign debt rating by six notches, citing support for Athens from its eurozone partners.
The upgrade from selective default to B-/B "reflects our view of the strong determination of European Economic and Monetary Union (eurozone) member states to preserve Greek membership in the eurozone", the agency said.
Greek Finance Minister Yannis Stournaras said the decision "was a very important one that created a climate of optimism".
The move came after Greece completed a debt buyback programme and eurozone finance ministers approved the latest batch of bailout cash.
Tuesday's decision provided a fillip for the euro, which added to recent gains against the dollar and yen.
In early European forex trade, the yen was under pressure in Asia as markets bet on more easing measures after a Bank of Japan (BoJ) policy meeting, while the single currency won support from a batch of positive eurozone news.
The euro firmed to 112.08 yen from 111.47 yen in New York late Tuesday, while it was at $1.3277, from $1.3225. On Tuesday in Asia the euro was at 110.49 yen and $1.3165.
And the dollar was quoted at 84.42 yen, compared with 84.28 yen in New York.
The Japanese currency remains under pressure as traders await the end of a two-day BoJ meeting on Thursday, with most expecting fresh monetary easing to kickstart the economy.
Incoming prime minister Shinzo Abe Tuesday asked central bank chief Masaaki Shirakawa to adopt a two percent inflation target, just days after his landslide election win on a promise of pressing for more aggressive monetary easing.
The weak yen again fuelled a rally on the Nikkei, which hit its highest level since early April.
There appeared to be little reaction to data showing Japan's November trade deficit expanded 37.9 percent on-year to $11.3 billion, a record for the month, with exports to China slumping owing to a bitter territorial spat with Beijing.
Oil prices rose, with New York's main contract, light sweet crude for delivery in January rising 38 cents to $88.31 a barrel and Brent North Sea crude for February delivery advancing six cents to $108.90.
Gold was at $1,674.39 at 1050 GMT compared with $1,698.90 late Tuesday.
In other markets:
-- Taipei rose 33.73 points, or 0.44 percent at 7,677.47.
Taiwan Semiconductor Manufacturing Co was 0.62 percent higher at Tw$97.3 while leading smartphone maker HTC fell 1.44 percent at Tw$274.5.
-- Manila soared 2.05 percent, or 115.80 points, to 5,752.39.
-- Wellington added 1.10 percent, or 43.75 points, to 4,023.00.
Telecom rose 1.6 percent to NZ$2.29, Mainfreight added 2.1 percent to NZ$11.30, Fletcher Building was up 2.10 percent to NZ$8.27 and Air New Zealand gained 0.78 percent to NZ$1.29.
-- Singapore closed up 0.06 percent, or 1.78 points to 3,158.57.
City Developments dipped 1.52 percent to Sg$13.00 while Wilmar International gained 1.27 percent to Sg$3.18.
-- Bangkok gained 1.13 percent or 15.46 points to 1,378.40.
Coal producer Banpu edged up 0.47 percent to 424.00 baht, while oil company PTT added 0.60 percent to 333.00 baht.
-- Jakarta ended down 25.57 points, or 0.59 percent, at 4,275.85.
Cement maker Semen Gresik fell 1.58 percent 15,550 rupiah, cigarette maker Gudang Garam lost 2.25 percent to 58,600 rupiah, while palm oil producer Astra Agro Lestari rose 2.77 percent to 18,550 rupiah.
-- Kuala Lumpur gained 6.2 points, or 0.37 percent, to close at 1,665.64.
AirAsia gained 0.4 percent to 2.58 ringgit. Tenaga Nasional lost 0.3 percent to 3.35 and IHH Healthcare fell 0.3 percent to 3.35 ringgit.
--Mumbai rose 0.57 percent or 111.25 points at 19,476.0 points.
Tata Motors rose 3.29 percent to 307.55 rupees, while ONGC rose 3.16 percent to 264.35.