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Asian markets tracked Wall Street higher on Thursday as investors following talks in the United States to avoid a fiscal cliff welcomed positive comments from both sides of the political divide.
Higher-yielding “riskier” currencies also rose slightly 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 0.62 percent, Hong Kong gained 0.48 percent, Sydney was 0.46 percent higher, Shanghai rose 0.17 percent and Seoul climbed 0.87 percent.
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 $1.2957, compared with $1.2939 in New York late Wednesday, while it was also at 106.50 yen, from 106.14 yen.
The dollar bought 82.17 yen, from 82.03 yen.
Oil prices rose. New York’s main contract, West Texas Intermediate (WTI) for January delivery, was up 16 cents at $86.65 a barrel in the morning, and Brent North Sea crude for January climbed 20 cents to $109.71.
Gold was at $1,722.02 at 0210 GMT compared with $1,740.80 late Wednesday.
Source: AFP
