Asian stocks rally on Wall Street's lead amid debt ceiling optimism

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Asia shares rallied on Thursday, following Wall Street's lead, and the dollar held just off a two-month high versus the yen amid signs Washington might be close to a deal to raise the debt ceiling and avert a first-ever default.

their determination to reach an agreement soon by pledging to negotiate directly on a deal amid estimates the Treasury could run out of money by the start of June.As investors drew comfort from that reassurance, MSCI's broadest index of Asia-Pacific shares"Markets have chosen to be optimistic," Rodrigo Catril, senior FX strategist at National Australia Bank, wrote in a client note.

"History, of course, tells us that a deal is more likely than not to be reached on the 11th hour, suggesting there is still room for a few bad headlines," he added, noting as a case in point. "Treasury has almost run through all of its authorised extraordinary measures to keep paying the bills."continued to outperform, surging to a fresh 20-month peak of 30,667.13, before last trading 1.6% higher at around 30,575. Any advance above 30,795.

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