Hong Kong - Asian markets were boosted on 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 1.12%, 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.
Hong Kong rose 0.51%, Sydney added 0.42% and Seoul was 0.51% higher, but Shanghai eased 0.30%.
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 $1m - 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 forex trade, the single currency firmed to ¥111.54 from ¥111.47 in New York late on Tuesday, while it was at $1.3231, from $1.3225. On Tuesday in Asia the euro was at $1.3165 and ¥110.49.
And the dollar was quoted at ¥84.32, compared with ¥84.28 in New York.
The Japanese currency remains under pressure as traders await the end of a two-day BoJ policy 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% on-year to $11.3bn, 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 two cents to $87.95 a barrel and Brent North Sea crude for February delivery advancing eight cents to $108.92.
Gold was at $1 674.44 at 02:00 GMT compared with $1 698.90 late on Tuesday.