Japan's Nikkei rose 0.6 percent while MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.1 percent, with South Korean shares leading the gain with a rise of 0.5 percent. "It seems like hopes on Greece drove the market. I expect the stock markets to stay supported on the back of recovery in the global economy," said Hirokazu Kabeya, senior strategist at Daiwa Securities.
TOKYO: Asian shares edged up on Thursday on vague hopes of a rescue deal for Greece while the dollar was at the helm in currency markets on expectations that the U.S. Federal Reserve will raise rates later this year.
Japan's Nikkei rose 0.6 percent while MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.1 percent, with South Korean shares leading the gain with a rise of 0.5 percent.
"It seems like hopes on Greece drove the market. I expect the stock markets to stay supported on the back of recovery in the global economy," said Hirokazu Kabeya, senior strategist at Daiwa Securities.
Although there are conflicting reports on the state of talks between Athens and international creditors, investors are pinning their hopes on a last-minute agreement as has been the case since the country's debt crisis began more than five years ago.
Greek officials voiced optimism for a cash-for-reforms deal on Wednesday, with economy minister George Stathakis saying Greece and its international creditors have converged on key points.
But German Finance Minister Wolfgang Schaeuble said there was not much progress in the debt talks and that he was surprised by the upbeat tone from some Greek government officials.
Uncertainty over whether Greece can get support so it is able to meet its payments to the International Monetary Fund on June 5 could keep investors cautious for now.
The dollar retained its strength sparked after remarks from Federal Reserve Chair Janet Yellen last Friday that she expected the central bank to raise rates this year as the U.S. economy was on course to bounce back from a sluggish first quarter.
The U.S. currency hit an eight-year high against the yen on Wednesday, rising to 124.09 yen, not far from its 2007 peak of 124.14. It last stood at 123.73 yen.
Many investors expect the Bank of Japan to take additional easing steps later this year, when the Fed is expected to start raising rates.
"Longer term, little stands in the way of further JPY losses," said Greg Moore, senior currency strategist at RBC in Sydney.
The dollar's index versus a basket of six major currencies hit a one-month high of 97.775 <.DXY> on Wednesday before easing back slightly to 97.327, as the euro recovered from lows on hopes of a deal for Greece.
The euro changed hands at $1.0893, off its one-month low of $1.0819 touched on Wednesday.
The dollar's strength helped drive down oil prices by three percent overnight.
Brent crude futures
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