Asian stocks mostly higher on fiscal cliff hopes; Nikkei soars 1.54%

Shutterstock photo - Asian equities were broadly higher in Wednesday's session as traders embraced the notion of progress on the ongoing fiscal cliff negotiations in the U.S.

In Asian trading Wednesday, Japan's Nikkei 225 was higher by 1.54%. The benchmark measure of Japanese stocks rose above 10,000 for the first time since April as the yen continued to falter against the U.S. dollar.

The Bank of Japan starts a two-day meeting today with traders widely anticipating some of form of added monetary stimulus. With Japanese interest rates already low, rate-cutting is probably off the table, meaning BoJ could disappoint the market if it does not boost asset-buying.

BoJ does have reason to weaken the yen. Earlier today, Japan's finance ministry said the country's export level dropped 4.1% in November resulting in a USD11.3 billion trade deficit.

Looking at other Asian bourses, Hong Kong's Hang Seng gained 0.7% while the Shanghai Composite was lower by 0.18%.

Australia's S&P/ASX 200 added 0.5% to a 17-month high despite lingering growth concerns. Earlier in Wednesday's Asian session, Westpac Banking Corp. and the Melbourne Institute said their survey of future Australian economic output rose 0.1% to 285.7 in October. However, ANZ Bank said the Australian economic outlook for 2013 remains soft. The bank cited declining investment in Australia's mining sector, high labor costs and a strong Australian dollar as reasons for its glum outlook.

New Zealand's NZSE50 added 1.1% after Statistics New Zealand said that New Zealand's current account balance fell to a seasonally adjusted NZD-4.42 billion, from NZD-1.80 billion in the preceding quarter.

Riskier assets got a lift from speculation that U.S. lawmakers are moving closer to solving the fiscal cliff. If the fiscal cliff sets in after January 1, 2013, it is widely expected the subsequent tax increases and spending reductions could shave 4% to 5% off U.S. GDP, sending the economy there into another recession. Another

While no agreement has been finalized, the Obama Administration and Congressional Republicans continue negotiations about averting the fiscal cliff and that alone seems to be giving traders reason to bid up riskier assets.

The sticking points appear to be from where spending cuts will come and the income threshold at which taxes will rise. President Obama has proposed raising taxes on those earning more than $400,000 per year while House Speaker John Boehner has proposed increased taxes for those earning $1 million or more per year.

Elsewhere, South Korea's Kospi added 0.51% while Singapore's Straits Times Index was higher by 0.1%. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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