Asian shares were steady near 16-month highs on Thursday, supported by hopes that US lawmakers will reach a compromise to avoid the so-called 'fiscal cliff' of year-end tax hikes and spending cuts which threaten to push the US economy back into recession.
The Dow Jones industrial average rose on Wednesday after President Barack Obama said a deal to avert the fiscal cliff was possible in "about a week" if Republicans compromise on taxes.
"The Obama remarks will have a positive impact on today's stock market," said Kwak Byeong-yeol, an analyst at Eugene Investment & Securities, of South Korean shares , which opened 0.1% higher.
MSCI's broadest index of Asia-Pacific shares outside Japan were little changed after scaling a 16-month high on Wednesday, pulled higher by a surge in Chinese equities after comments from the new Communist Party chief reassured investors of the country's commitment to economic stimulus.
Hong Kong shares soared to their highest since August 2011 on Wednesday, while the Shanghai Composite Index climbed 2.9% above the 2,000-point mark for the first time after hitting near four-year lows last week.
On Thursday, Australian shares eased 0.2% while Japan's Nikkei stock average climbed 0.8% to a seven-month high, drawing support from a weaker yen.
The dollar was trading at 82.42 yen, not far from a 7-1/2-month high of 82.84 hit on November 22, on expectations the upcoming December 16 election will usher in a new government that will pressure the central bank to pursue more aggressive easing.
"Investors will be closely watching moves in foreign exchange, to see if the yen's recent weakness is sustainable," said Kenichi Hirano, operating officer at Tachibana Securities.
The euro steadied around $1.3071, but was off a seven-week high of $1.3127 touched earlier on Wednesday as a disappointing Spanish bond auction reminded investors of the country's fragile fiscal health.
Weak euro zone economic data also weighed on sentiment for the single currency, with a mixed batch of business and retail data showing euro zone shoppers cut back on spending by the biggest margin in six months in October, while purchasing manager figures pointed to another quarter of recession.
The European Central Bank holds a policy meeting later in the session.
While the bank is expected to keep its benchmark interest rate on hold at 0.75%, investors will be looking for clues on whether ECB President Mario Draghi will show a greater willingness to cut borrowing costs in the future as the euro zone recession deepens.
Ahead of key US monthly nonfarm payrolls due on Friday, private payrolls processor ADP reported that private-sector employers added 118,000 jobs in November, fewer than expected as Superstorm Sandy took a toll on hiring, though activity in the service sector continued to expand.
US crude futures were down 0.1% at $87.84 a barrel.
Spot gold was down 0.1% at $1,691.96 an ounce. Gold fell to a one-month low below $1,700 on Wednesday, after a weaker price forecast by Goldman Sachs triggered some fund liquidation.
