SYDNEY (BLOOMBERG) - Asian stocks followed Wall Street higher on Thursday (Sept 7) after US President Donald Trump bypassed his own Republican Party and struck a deal with Democratic congressional leaders on Wednesday to increase the US debt limit.

US equities rose as investors weighed the deal that ensures the funding of its government through mid-December against persistent geopolitical tensions. The yen stayed lower after an overnight drop.

Shares advanced in Tokyo, Seoul and Sydney, lifting the MSCI Asia Pacific Index up 0.3 per cent.

The Topix index rose 0.6 per cent as of 9:18am Tokyo time, while the Kospi index in South Korea was up 0.6 per cent and Australia's S&P/ASX 200 Index added 0.4 per cent. Futures on Hong Kong's Hang Seng index gained.

US markets gyrated late Wednesday amid several events that happened in rapid succession, including the resignation of Federal Reserve vice chairman Stanley Fischer and a surprise Canadian interest-rate increase. Traders are also watching Category 5 hurricane Irma, which is headed for Florida.

While the US agreement pushes to the side the North Korea confrontation that has dominated markets most of this week, traders will remain watchful for developments amid reports Pyongyang may fire a ballistic missile before its "founding day" on Sept 9. Meanwhile, the Fischer departure, effective next month, adds to uncertainty about Fed leadership, given that Janet Yellen's term as chair expires early next year.

Attention now turns to the European Central Bank meeting on Thursday, with investors looking for clarity from President Mario Draghi on the outlook for the the ECB's bond-buying program. The Governing Council has been presented with documents outlining multiple scenarios for adjusting quantitative easing, according to euro-area officials familiar with the matter.

The Japanese yen was steady at 109.17 per US dollar after falling 0.4 per cent Wednesday, when it had earlier traded near its highs for the year. The Australian dollar was back above 80 US cents.

The Bloomberg Dollar Spot Index was down less than 0.1 per cent; it hasn't risen since last Wednesday.

The euro was little changed at US$1.1924.

The yield on 10-year Treasuries held at 2.10 per cent after jumping about four basis points Wednesday. Australia's 10-year yield rose five basis points to 2.65 per cent.

Gold was steady at US$1,333.33 an ounce after falling 0.4 per cent Wednesday.

West Texas Intermediate crude was little changed at US$49.13 a barrel after jumping 1 per cent.