HONG KONG: Asian markets were mixed on Thursday, following the previous day’s huge gains after US lawmakers agreed a deal to avert the fiscal cliff, while concerns over upcoming fights in Washington hurt sentiment.

The yen clawed back some of its losses against the euro and dollar, but remains under pressure on expectations of further monetary easing by the Bank of Japan. Sydney rose 0.74 percent, or 34.8 points to 4,740.7—the highest since May 2011—but Seoul slipped 0.58 percent, or 11.69 points to 2,019.41 and Hong Kong eased 0.18 percent in the afternoon.

Shanghai and Tokyo were closed for public holidays. Relief that Washington had reached a last-minute deal to avoid huge tax hikes and spending cuts sent global markets soaring on Wednesday, with Hong Kong hitting a 19-month high and Wall Street also starting the year with a bang.

The Dow jumped 2.35 percent, the S&P 500 added 2.54 percent and the Nasdaq surged 3.07 percent.

Economists had warned that going over the cliff would have likely seen the economy tip into recession, with knock-on effects for the rest of the world.

Other worries
However, while Democrats and Republicans passed a compromise, they only delayed the imposition of spending cuts for two months, meaning that another debilitating stand-off is almost certain at the end of February.

There are also worries about the lifting of the debt ceiling, also at the end of February, with analysts saying that the country could see a repeat of the row in summer 2011 that saw Washington’s credit rating downgraded for the first time.

“It’s good that they struck a deal, but there’s a harder fight in the next six to eight weeks, and it’s tough to imagine the market doesn’t stay choppy until we get past the debt-ceiling debate,” Richard England, portfolio manager for Atlanta Capital Management, told Dow Jones Newswires.

Investors will now be looking ahead to the release on Friday of US jobs data for a better idea of the state of the world’s number one economy.

On currency markets the euro bought $1.3145 from $1.3184 in New York City late on Wednesday. The euro was at 114.75 yen from 115.13.

The dollar fell to 87.28 yen from 87.32 yen.

The yen picked up slightly after suffering heavy selling on Wednesday, with dealers taking the opportunity to take profits on Thursday. But it is likely to face further pressure as expectations rise for more central bank easing.

Oil prices eased, with New York City’s main contract, light sweet crude for delivery in February down 18 cents to $92.94 a barrel in the afternoon and Brent North Sea crude for February delivery shedding 29 cents to $112.18.

In other markets: Taipei rose 0.74 percent or 57.62 points to 7,836.84; and Wellington rose 0.39 percent, or 15.85 points to 4,082.37.