Asian shares rise on US budget hopes Tuesday 03.00 GMT. Asian shares crept higher as investors took heart from signs of progress in US budget talks while Japanese shares continued their upward trend, following the Liberal Democratic party's crushing election victory on Sunday. Sentiment improved after US President Barack Obama and House Speaker John Boehner met on Monday after Mr Boehner dropped his opposition to raising tax rates for some top earners. "As fiscal cliff discussions continue, the overall tone remains constructive for risk assets," Crédit Agricole said in a research note. Japan's Nikkei 225 Stock Average rose 0.5 per cent on expectations that the country's new government will call for more aggressive monetary easing with the Bank of Japan starting a two-day policy meeting on Wednesday. "[The LDP's landslide victory] raises the prospect of swift decision-making for economic stimulus measures and other policies," Nomura said in a research note. Bank shares were lifted by hopes that the BoJ will ease monetary policy further, with Mitsubishi UFJ Financial Group jumping 1.5 per cent. Tokyo Electric Power soared 25 per cent after climbing 33 per cent on Monday on speculation the new political leadership may allow nuclear reactors to be reactivated. SoftBank surged 3.5 per cent after the telecom company said it will sign a Y1.65tn bridge loan contract to fund its acquisition of Sprint Nextel. Australia's S&P/ASX 200 index gained 0.7 per cent on continued strength in iron ore prices. Spot iron ore prices jumped 2.2 per cent overnight, pushing Rio Tinto 1.9 per cent higher and driving Fortescue Metals Group up 1.7 per cent. South Korea's Kospi Composite index added 0.3 per cent a day before the country's presidential election. But auto shares dragged on the market amid concerns the won's strength against the yen would hurt automakers" profitability. Hyundai Motor fell 1.1 per cent and its affiliate Kia Motors lost 1.5 per cent. Hong Kong's Hang Seng index was little changed while China's Shanghai Composite index declined 0.5 per cent, hit by profit-taking after rising nearly 5 per cent over the previous two sessions. Banks lost ground with Ping An Bank and China Minsheng Bank down 0.5 per cent each after surging 8.2 per cent and 8.3 per cent respectively in the previous two sessions. In currency markets, the yen was trading higher at Y83.91 against the US dollar after hitting a 20-month low of Y84.48 on Monday, as Japan's next premier Shinzo Abe is expected to add pressure on the Bank of Japan to introduce more aggressive monetary stimulus measures to prop up the faltering economy. Earlier, Wall Street's S&P 500 staged a late surge to close at its best level of the day, up 17 points to 1,430.