* Markets on defensive as fiscal talks hit stumbling block
* Dollar holds steady for now, yen under pressure
SYDNEY, Jan 2 (Reuters) - Markets were eerily quiet in Asia
as trade resumed on Wednesday with investors anxiously waiting
to see if the U.S. Congress could strike a last-minute deal to
avoid triggering tax rises and spending cuts that could threaten
the global economy.
The U.S. Senate early on Tuesday passed a bill that aims to
avoid the "fiscal cliff" of $600 billion in automatic spending
cuts and tax increases.
However, the package immediately ran into opposition from
House Republicans, who were meeting to decide whether to reject
or amend the bill.
"Frankly, we don't know what to make of it all. It's like a
circus there," said one exasperated forex dealer at an
Australian bank in Sydney.
"The markets have always assumed they would eventually
strike a deal that would avoid the worst affects of the fiscal
cliff, but it's getting harder and harder to stay optimistic."
He suspected equity markets would be on the defensive as
they opened, with safe-haven bonds in demand. Getting a read on
trends was tricky as U.S. Treasuries and stock futures were yet
to trade, while Tokyo was off on holiday.
Currencies were trading, but the only major move was further
weakness in the Japanese yen as investors wagered the Bank of
Japan would have to take ever more aggressive easing steps to
support the economy and satisfy the new government.
The dollar held firm on the yen at 86.75 yen, having
touched its highest level since August 2010. The Japanese
currency also dropped to depths not seen in over four years
against the Australian and New Zealand dollars.
The euro was a shade firmer against the U.S. dollar at
$1.3216, but turnover was extremely thin.
Spot gold gold was little changed at $1,674 an ounce,
while oil futures dipped 20 cents to $91.62.