GLOBAL MARKETS-Asian shares up with eye on "fiscal cliff"; yen slips more
* MSCI Asia ex-Japan inches up 0.3 pct
* US set to resume last-minute attempt to avert "fiscal cliff"
* Nikkei hits 21-month high as yen slips to two-year low vs dollar
TOKYO, Dec 27 (Reuters) - Asian shares rose on Thursday amid caution about the chances of U.S. lawmakers striking a deal to avoid a fiscal crunch by Dec. 31, while the yen hit a 21-month low against the dollar on the prospect of drastic monetary easing and massive state spending.
In a sign that there may be a way to break the deadlock in Congress, Republican House of Representatives Speaker John Boehner urged the Democrat-controlled Senate to act to pull back from the cliff, and offered to at least consider any bill the upper chamber produced.
U.S. President Barack Obama will try to revive budget crisis talks which stalled last week when he returns to Washington on Thursday after cutting short his Christmas holiday in Hawaii.
Economists warn that the "fiscal cliff" of higher taxes and spending cuts worth $600 billion in the world's largest economy could hurl it into recession, dragging other economies with it.
Such concerns pushed up a gauge of investor anxiety, the CBOE Volatility Index, to 19.48, its highest close since late July, also underpinning the dollar as the fiscal impasse continues to sap investor appetite for risky assets, raising the dollar's safe-haven appeal.
"The consequences of (U.S. lawmakers) not coming to some arrangement are very, very harsh and I think it's all politicking at the moment and we'll see some resolution," said Winston Sammut, investment director, Maxim Asset Management.
There were some signs of economic improvement in the Asian region, with data showing profits earned by China's industrial companies jumped 22.8 percent in November from a year earlier, accelerating from October's 20.5 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3 percent, with Australian shares adding 0.3 percent and Hong Kong shares adding 0.4 percent, though Shanghai and Seoul shares were down.
U.S. stocks fell slightly in thin volume, and European markets were shut for the Christmas holiday.
London copper rose 1.7 percent to a one-week high of $7,932 a tonne on the positive data from the world's top copper buyer China.
U.S. crude futures were down 0.2 percent at $90.80 a barrel, after rising overnight to the highest in more than nine weeks on hopes that renewed talks will prevent a U.S. fiscal crisis. Brent crude eased 0.2 percent to $110.83.
BOLD IN JAPAN
Against the yen, the dollar at 85.84 yen reached its highest since September 2010, with investors accelerating their yen sales after new Japanese Prime Minister Shinzo Abe said his government will pursue bold monetary policy, flexible fiscal policy and a growth strategy to encourage private investment.
Abe has pledged to make his top priority beating deflation and taming the strong yen, which are dragging down the world's third biggest economy.
The yen is on track for a drop of over 10 percent this year, its steepest since 2005. The yen also fell to a 16-month low against the euro at 113.58 yen on EBS on Wednesday.
The weaker yen, a boon for Japanese exporters, lifted the benchmark Nikkei stock average up 1.4 percent to its highest since March 2011. It is on track to log its best yearly gain since 2005.
"People are putting on some positions based on what we saw after the cabinet appointment and LDP policy decision," a dealer at a foreign brokerage said, referring to the ruling party.
The yen is expected to stay under pressure given the new Japanese government's clear resolve to prevent it rising.
Japan's top government spokesman said on Thursday that recent yen declines were a reversal of past "one-sided" gains in the Japanese currency.
"I'm still bullish on the dollar/yen quite a bit," said a trader for a U.S. bank in Singapore. "In this thin market, I think anything can happen. But definitely I wouldn't go against the trend. The trend is quite clear at this point in time."
New Japanese Finance Minister Taro Aso said on Thursday the prime minister has ordered him to compile a stimulus package without adhering to the previous government's 44 trillion yen (519 billion) cap on new bond issuance.
The benchmark 10-year Japanese government bond yield added 1 basis point to 0.795 percent, its highest since Oct. 18. The lead 10-year JGB futures eased to 143.54, just one tick above its session low, which was its lowest level since Sept. 18.