* US optimism of fiscal deal boosts markets
* MSCI Asia ex-Japan hits 3-week high, Nikkei gains 0.7 pct
* Euro steadies vs dollar, dollar up vs yen
* Commodities recover
By Chikako Mogi
TOKYO, Nov 29 (Reuters) - Asian shares hit a three-week high and commodities rose on Thursday as sentiment improved after a senior U.S. lawmaker said he was "optimistic" on reaching a budget deal before the end of the year to avoid a fiscal crisis.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 percent, after ending a seven-day winning streak on Wednesday with a 0.3 percent drop.
Japan's Nikkei stock average advanced 0.7 percent, rebounding from the previous session's one-week closing low.
Australian shares rose 0.5 percent to three-week highs, supported by banks and gains in global miner Rio Tinto after its upbeat outlook on China and cost-cutting pledges.
Market gains were subdued, however, with moves largely attributed to position adjustments ahead of year-end bookclosing, as investors were reluctant to make bets given a lack of clarity on the prospects for U.S. budget talks as well as global growth.
"There is less negative news but there are also few decisively positive news, leaving investors rotating in and out of assets which have been overbought or battered, but basically keeping their positions more or less neutral in whatever assets they have," said Yuuki Sakurai, chief executive of Fukoku Capital Management.
"Whether it's the U.S. fiscal cliff or the euro zone debt crisis, it's the same process of muddling through, taking three steps forward and two steps backward, but nevertheless making progress, so that's helping ease concerns of sharp downside risks and keeping markets in ranges," he said.
U.S. equities jumped overnight after U.S. House of Representatives Speaker John Boehner voiced optimism that Republicans could broker a deal with the White House to avoid year-end austerity measures.
President Barack Obama later said he hoped an agreement can be reached before Christmas to avoid a "fiscal cliff" of tax increases and spending cuts worth $600 billion due to start in the new year and aimed at shrinking the budget deficit.
"After gains in U.S. stocks, the main board is following suit," Oh Seung-hoon, an analyst at Daishin Securities, said of Seoul shares. "Sectors such as autos and shipbuilding that recently saw comparatively steeper losses are seeing greater gains."
Market players remain wary of a lack of specifics on how the two major political parties plan to arrive at a compromise.
But sentiment has tended to improve on positive comments, reflecting nervousness that if U.S. lawmakers fail to strike a deal, they risk pushing the U.S. economy into recession and dragging down global growth.
The U.S. economy was generally on a "measured" pace of recovery in recent weeks and hiring remained modest, a Federal Reserve report said. Other U.S. data on Wednesday showed that new single-family home sales fell slightly in October and the government revised sharply lower its estimate for September sales, denting optimism over the housing market recovery.
NO CLEAR TREND
Asia's growth prospects remain mixed, with economies such as Indonesia and the Philippines underpinned by healthy domestic demand and government spending while others such as South Korea and Japan are dragged down by sluggish domestic demand and falling exports.
A key South Korean manufacturing business survey showed on Thursday its index for December fell to match a more than 3-year low, with companies citing economic uncertainties.
China's economy appears to have emerged from its lows but the outlook is uncertain. The Shanghai Composite Index fell to its lowest in nearly four years as growth-sensitive sectors sank, extending losses after closing on Tuesday below 2,000 points for the first time since January 2009.
The euro was steady around $1.2954 after peaking at $1.3010 on Tuesday, its highest level since Oct. 31, on news of a deal on Greece's debt reduction plan paved the way for further aid to prevent Athens' from an imminent default.
The dollar also was barely changed at 82.01 yen.
U.S. crude futures rose 0.2 percent to $86.66 a barrel and Brent also inched up 0.2 percent to $109.75.
Spot gold was up 0.1 percent to $1,720.61 an ounce after slumping 1.5 percent on Wednesday for its biggest one-day drop in nearly a month when deflation worries related to a U.S. fiscal crisis and debt-stricken Greece triggered a heavy bout of stop-loss orders from momentum-driven fund investors.
But investment interest remained high, as illustrated by holdings of the SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, hitting a record high for a second consecutive day at 1,347.018 tonnes on Nov. 28.
"Generally, people are still pretty bullish on gold and last night was just a one-off correction, nothing extraordinary," said a Singapore-based trader, adding that $1,650-$1,700 would be a good buying level.
Investors were cautiously bullish in Asian credit markets, tightening the spreads on the iTraxx Asia ex-Japan investment-grade index by 1 basis point.