BANGKOK — Asian stock markets remained in a holding pattern Thursday as investors assessed President Barack Obama’s comments that reaching a budget deal to prevent the U.S. from a possible recession was “not that tough” and could even be done quickly.
Obama’s remarks follow days of contentious negotiations between the White House and Congress on a deal to avert the so-called “fiscal cliff” of automatic spending cuts and tax increases at the start of next year. Without a deal, the U.S. could fall back into recession and drag much of the world down with it.
Wall Street stocks ended higher Wednesday after Obama was quoted telling business leaders in Washington that, despite a deep divide on critical issues, political leaders “can probably solve this in about a week, it’s not that tough.”
Obama is demanding that Republicans agree to raise tax rates for the richest Americans as part of a deal to rein in future deficits. Republican leaders say they will agree to higher revenue, but they want to close loopholes or reduce tax breaks rather than raise rates.
Chris Weston of IG Markets in Melbourne said in a market commentary that “there are distant signs that both parties should come to at least a short-term agreement. Certainly the market is seeing it that way and giving the situation the benefit of the doubt.”
Japan’s Nikkei 225 index rose 0.8 percent, in part buoyed by a weaker yen, to 9,541.21. South Korea’s Kospi rose 0.3 percent to 1,952.66. Hong Kong’s Hang Seng fell 0.1 percent to 22,245.56. Benchmarks in Indonesia, New Zealand and the Philippines rose while Singapore, Australia and mainland China fell.
Benchmark oil for January delivery was down 15 cents to $87.73 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 62 cents to finish at $87.88 per barrel on the Nymex on Wednesday.
In currencies, the euro fell to $1.3056 from $1.3079 late Wednesday in New York. The dollar rose to 82.52 from 82.35 yen.