Investing.com - News that U.S. policymakers have finally reached a deal to dodge the dreaded fiscal cliff sent Asian stocks soaring in the first session of the new year for many of the region's major bourses.
In Asian trading Wednesday, Hong Kong's Hang Seng advanced 1.91%. Due to public holidays, the Shanghai Composite and Japan's Nikkei 225 are closed today and tomorrow.
Heading into today's session, traders knew that the U.S. Senate had overwhelmingly passed a measure that would raise taxes on American households earning more than USD450,000 per year, which is expected to generate USD620 billion in revenue over the next 10 years.
The sticking point appeared to be the desire of House Republicans to attach more than USD300 billion in additional spending cuts to the Senate measure, which was easily passed with a 89-8 vote. However, the Senate held firm and made clear it would accept changes to its bill.
With that in mind, the House passed the Senate's fiscal cliff legislation with a 257-167 bipartisan vote. News of that vote sent riskier assets soaring while the Japanese yen continued to falter against the world's major currencies.
Elsewhere, South Korea's Kospi climbed 1.47% after a data report showed manufacturing activity there improved for the first time in several months while Singapore's Straits Times Index added 1.24% on the back of a surprising GDP report. Singapore's GDP rose 1.8% in the fourth quarter, topping economists' expectations that called for an increase of 1.6%. Singapore is one of the first Asian nations to report fourth-quarter GDP results.
Adding to the risk on tenor to the day, USD/JPY continued to rise while the yen labored near four-year lows against the Australian and New Zealand dollars as traders appeared to be willing to bet the Bank of Japan takes a more aggressive posture regarding monetary easing this year.
Meanwhile, New Zealand's NZSE 50 fell 0.35% due to the strong kiwi while Australia's S&P/ASX 200 climbed 1.3%, buoyed by rises in mining and materials shares.
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