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November 29 2012, 8:10PM

Asian markets have mostly tracked Wall Street higher as investors welcomed positive comments from both sides of the US political divide following talks aimed at avoiding a fiscal cliff.

Higher-yielding "riskier" currencies also rose on Thursday 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 per cent, or 92.53 points, to 9,400.88, Sydney was 0.68 per cent, or 30.4 points, higher at 4,477.7 and Seoul climbed 1.15 per cent, or 22.07 points, to 1,934.85.

Hong Kong also rose 0.99 per cent, picking up 213.91 points to 21,922.89, but Shanghai fell 0.51 per cent, 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 on 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 on Wednesday. The Dow climbed 0.83 per cent, the S&P 500 gained 0.79 per cent and the Nasdaq added 0.81 per cent.

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 $US1.2966, compared with $US1.2939 in New York late on Wednesday, while it was also at Y106.56, from Y106.14.

The dollar bought Y82.16, from Y82.03.

Oil prices rose. New York's main contract, West Texas Intermediate for January delivery, was up 44 US cents to $US86.93 a barrel in the afternoon, and Brent North Sea crude for January climbed 30 US cents to $US109.81.

Gold was at $US1,720.36 at 1910 AEDT, compared with $US1,740.80 late on Wednesday.

In other markets:

- Taipei rose 0.92 per cent, or 68.62 points, to 7,503.55.

HTC rose 1.17 per cent to $Tw259.0, while TSMC was 0.63 per cent higher at $Tw96.5.

- Manila closed 0.12 per cent higher, adding 6.73 points to 5,640.45.

SM Investment gained 4.09 per cent to 877 pesos while BDO Unibank rose 0.49 per cent to 71.45 pesos. Philippine Long Distance Telephone Co. was unchanged at 2,586 pesos.

- Wellington ended 0.12 per cent higher, adding 4.62 points to 4,016.77.

Sky Television rose 3.0 per cent to $NZ5.22 and Tower advanced 2.6 per cent to $NZ1.95.

By Danny McCord