Asian shares rise as US House passes fiscal-cliff dealContinue reading the main story
Last Updated at 08:14 ET
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Asian markets have risen after the US House of Representatives passed a deal to stave off the so-called fiscal cliff.
A failure to agree a deal would have triggered spending cuts and tax increases worth $600bn (£370bn).
There had been fears that the measures would have derailed economic recovery in the world's biggest economy and perhaps even push it into a recession.
Hong Kong shares gained 2.9% and South Korea's Kospi added 1.7%.
Singapore's Straits Times index gained by 1.3%. Financial markets in Japan and mainland China were closed for a public holiday.
Along with being the world's largest economy, the US also is a key market for most of Asia's export-dependent economies.
There were concerns that if the full effects of the fiscal cliff were allowed to take hold, it may have led to a reduction in consumer spending.
That in turn could have hurt demand for Asian exports to the US and impacted growth amongst the region's leading manufacturers and economies.
Analysts said the approval of the deal had helped allay those fears among investors.
"With the final hurdle being passed now, we've got a minimum deal that avoids any immediate threat of the US falling off the cliff," said Jason Hughes, head of premium client management for IG Markets Singapore.
"That's definitely boosted Asian equities markets," he said.Regional boost
Market sentiment was also boosted by some encouraging regional economic data.
Manufacturing activity in China, the region's biggest economy and one of the key drivers of global growth in recent years, expanded for the third straight month in December.
China's official Purchasing Managers' Index (PMI), a key indicator of activity in the sector, stood at 50.6 in December. A reading above 50 shows expansion.
Meanwhile, a survey of manufacturing activity in South Korea indicated an expansion in the sector for the first time in seven months in December.
Over in Japan, the yen continued to weaken against the US dollar.
The Japanese currency was trading as low as 87.30 yen against the US dollar, the lowest level since July 2010.
Japan's new Prime Minister, Shinzo Abe, has promised to take measures to weaken the yen to help revive the country's struggling economy.
The yen has fallen almost 9% against the US dollar since 15 November amid hopes of additional stimulus from the newly elected government.
A weaker yen bodes well for Japanese exporters as it makes their goods more affordable to foreign buyers and also helps boost profits when they repatriate their foreign earnings back home.