Sydney - Financial markets across Asia and Western Europe were either closed or closing early on Monday, abandoning the field as the US Congress and the White House battled it out for a solution to the impending "fiscal cliff".
Market holidays were in force in Japan, South Korea, Taiwan, Indonesia, Thailand, the Philippines and Vietnam, with half-day trading in Australia, New Zealand, Hong Kong and Singapore.
MSCI's broadest index of Asia-Pacific shares outside Japan was effectively unchanged given the extensive market closures. It has gained about 18% this year, a sharp turnaround from an 18% plunge in 2011.
In Washington, Senate Majority Leader Harry Reid said the Senate would resume sitting at 11:00 Washington time (16:00 GMT), to continue discussions, but there were still significant differences between the two sides.
S&P 500 futures were up 5.6 points, to 1 389.40 in electronic trading at 00:30 GMT. Dow and Nasdaq futures were also slightly higher on news the parties were still talking.
But traders said the rise in the futures market did not necessarily bode well for a Wall Street rally on Monday after the cash market and futures markets closed far apart on Friday.
"Hard to predict how or when there will be a deal, but I believe investors will show their displeasure tomorrow by selling stocks if there is no deal," said Mohannad Aama, managing director at Beam Capital Management, an investment advisory firm in New York.
The US dollar was trading around ¥85.96-97, off its two-year, four-month highs above ¥86.63-64 seen last Friday as investors sold to take profits amid the fiscal cliff uncertainty.
The euro inched up 0.14% to 1.323 on Monday. An agreement on the US budget would be viewed as positive for riskier currencies such as the euro and Australian dollar, while a deadlock is deemed positive for the haven and highly liquid dollar.
The Australian dollar was around $1.0365, from $1.0375 in late New York on Friday. It touched a one-month low of $1.0345 last week, but is on track to finish up 1.4% this year.
The Aussie dollar was supported by a bounce in iron ore prices, which hit eight-month highs at $139.40. Prices are now up 61% from the lows hit in September.
Australian shares fell 0.4% in a shortened session on Monday ahead of the New Year's Day holiday with big miners and banks losing ground as investors awaited the outcome of the US budget talks.
The benchmark S&P/ASX 200 index fell 19.4 points to 4,651.9 at 00:28 GMT. It rose 0.5% to 4,671.3 on Friday, its highest close since June 2 2011.
Although iron ore prices had jumped to eight-month high, a weaker US economy could bite into the gains in commodities, said Damien Boey, an equity strategist at Credit Suisse.
"If you've got a weaker American economy because taxes have gone up and confidence is down, what you will find is that the key driver of commodities prices, which is the Chinese economy, will not actually be able to sustain strong growth," he said.
Gold added $1.25 an ounce to $1 656.64 by 00:04 GMT. Gold is up around 6 percent for the year and is on track for a 12th consecutive year of gains on rock-bottom interest rates, concerns over the financial stability of the eurozone, and diversification into bullion by central banks.
US crude futures slipped on Monday for a third consecutive session the budget crisis, with failure to reach a solution seen causing a large drop in fuel consumption.
US crude for February delivery was down 14 cents to $90.66 a barrel by 23:53 GMT after a 2.4% gain last week. Front-month prices are on track to post an 8% fall in 2012, after three straight annual gains. Brent crude slipped 26 cents to $110.36 a barrel, but is set to post a 2.8% year-on-year increase in 2012, up for a fourth consecutive year.
Hong Kong shares could end 2012 off 18-month closing highs on Monday as the United States dithered on a deal that will avert a fiscal crisis, with turnover likely weak in a half day session before shutting for the New Year's Day holiday.
Last Friday, the Hang Seng Index crept up 0.2% to 22 666.6, its highest closing level since July 8, 2011. It is up 23% on the year to date after sinking 20% in 2011.
The China Enterprises Index of the top Chinese listings in Hong Kong rose 0.3% last Friday to its highest close since August 5 2011. The H-shares index is up 14.5% in 2012 after diving 22% last year.