Asian stocks gain on US budget hopes Monday 03:00 GMT Asian shares rose, inspired by gains on Wall Street, after President Barack Obama expressed confidence over an agreement with congressional leaders to resolve the fiscal challenges facing the US. The MSCI Asia Pacific index gained 0.8 per cent with Japan's Nikkei 225 Stock Average up 1.4 per cent, South Korea's Kospi Composite index 0.9 per cent higher and Australia's S&P/ASX 200 inching up 0.1 per cent. Hong Kong's Hang Seng index advanced 0.4 per cent while the Shanghai Composite index slipped 0.4 per cent. Investors were encouraged by the possibility of a budget compromise to avoid the looming fiscal cliff of a $600bn combination of tax rises and spending cuts spending set to take effect in January. House Speaker John Boehner, the Republican speaker of the House of Representatives, described Friday's talks with Mr Obama as "very constructive." "The good news is the tone of Friday's White House meeting but the prospect of no agreement until at least mid-December fits our view that the two sides are starting negotiations from rather distant points," Sean Callow, senior currency strategist at Westpac Bank in Sydney, said in a note. Japanese stocks continued to outperform the regional markets on expectations that a new government after the December 16 general election would introduce more stimulus measures. Toyota Motor, the world's biggest automaker by sales, rallied 2.1 per cent while Japan Tobacco surged 6.6 per cent as the government plans to postpone the sale of its stake in the cigarette maker. In Sydney, Billabong International climbed 11 per cent after the surf-wear maker said one of its directors is exploring a leveraged buyout. China Petroleum & Chemical led oil producers higher in Hong Kong, rising 2 per cent. But on the mainland, stocks fell for a third day, with property shares retreating amid expectations Beijing will not relax curbs on the property market. China Vanke lost 1.2 per cent and Poly Real Estate slid 2.2 per cent. In the currency markets, the yen hit a seven-month low of Y81.59 against the US dollar before rebounding to Y81.32, as the Bank of Japan began a two-day monetary policy meeting. The Australian dollar was trading at $1.0360, compared with $1.0336 late on Friday. In the commodities markets, oil prices rose on supply concerns as Israel escalated its attacks on Gaza. US crude futures gained 0.8 per cent to $87.65 a barrel.