BEIJING - Asian investors on Thursday tracked a strong Wall Street rally, fanned by optimism over talks to avert a catastrophic US debt default.
Markets have been skittish in recent sessions with Republicans and Democrats unable to find common ground as the deadline for a deal to raise the country's borrowing limit approached.
But talks this week between President Joe Biden, House Speaker Kevin McCarthy and congressional leaders appear to have been more fruitful.
"I'm confident that we'll get the agreement that we need on the budget and that America will not default," Biden said at the White House just before he set off for the G7 summit in Japan.
Treasury Secretary Janet Yellen has warned that the US government would likely run out of cash by June 1 while the non-partisan Congressional Budget Office has forecast June 15.
Most economists have warned that world markets would be sent into turmoil and the already fragile global economy would take a severe hit if lawmakers do not lift the debt ceiling and the United States defaults.
And in a sign of the worry the issue is causing on Wall Street, a number of top bank executives visited Washington to hold talks with congressional leaders.
Afterwards, JPMorgan Chase CEO Jamie Dimon told reporters: "The US should not and probably will not default."
The news of progress was greeted warmly on Wall Street, where all three main indexes ended more than one percent higher, and Asia followed in early business Thursday.
Tokyo and Hong Kong each piled on more than one percent, while there were also healthy gains in Shanghai, Sydney, Seoul, Singapore, Taipei, Manila, Taipei and Wellington.
Still, some observers said that while the outlook was improving, there could still be bumps in the road.