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Hong Kong - Asian markets rallied Friday on hopes the US will avoid a default as President Barack Obama and Republican leaders held their first talks on resolving a budget impasse that has already shut the government down.
The gains followed Wall Street's best day since January as dealers welcomed progress on the ending the crisis with less than a week before Washington runs out of cash to pay its bills.
Tokyo rose 1.16%, Hong Kong jumped 1.60%, Sydney was 1.59% higher, Shanghai added 0.47% and Seoul climbed 1.13%.
After 10 days of deadlock Republicans proposed to extend the US borrowing limit for six weeks in return for an agreement by Obama to negotiate on a budget that would restart federal operations.
The White House said Obama would be open to a short-term debt ceiling hike.
Following 90 minutes of talks at the White House, Republican second-in-command Eric Cantor offered an upbeat report, despite no deal yet being struck, telling reporters: "It was a very useful meeting, we had a constructive conversation."
He said both sides would consult aides and continue discussions later on Thursday.
While a deal to raise borrowing would postpone a devastating default - which economists warn would likely spark another global recession - it would not end the government shutdown, which began on October 1.
Jack Ablin, chief investment officer at BMO Private Bank, said the developments suggest "both sides appreciate the gravity of a default".
He added: "It's not worth sending our country into a tailspin over ideological differences. I think investors are breathing a sigh of relief."
Thursday's events helped Wall Street shares enjoy their best day since the beginning of the year, when lawmakers agreed a deal to avoid the fiscal cliff of tax hikes and government spending cuts.
The Dow surged 2.18% to 15,126.07, just below its level on the eve of the October 1 shutdown. The S&P 500 jumped 2.18% and the Nasdaq added 2.26%.
And in currency trade the dollar edged back up against the yen after falling to six-week lows earlier in the week.
The greenback bought ¥98.37 in early trade, up from ¥97.91 in New York late on Tuesday.
The euro bought $1.3522 and ¥132.96 against $1.3526 and ¥132.58.
On oil markets New York's main contract, West Texas Intermediate for delivery in November was down 34 cents to $102.67 while Brent North Sea crude for November eased 30c to $111.50.
Gold cost $1 289.59 at 02:05 GMT compared with $1 301.79 on Thursday.
