* Asian stocks track Wall Street higher, yen broadly lower
* All eyes on whether Washington can agree on a debt deal
* Some progress seen, but situation still very fluid
* European stocks seen rising for a second session
By Ian Chua
SYDNEY, Oct 11 (Reuters) - Asian stocks jumped to three-week highs on Friday as investors took a chance and cheered perceived progress in Washington to avert a possible debt default, even though questions remained over whether a deal could be struck in the next week.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.2 percent, reaching highs not seen since Sept. 19. Tokyo's Nikkei climbed 1.2 percent.
The region's emerging markets also rose, with Chinese and Indian shares both up around 1.0 percent. MSCI's broad emerging benchmark equity index put on 0.7 percent.
Financial spreadbetters expect Britain's FTSE 100 to open up by 41-43 points, a rise of 0.7 percent. Germany's DAX was seen opening 53-60 points higher, also a 0.7 percent gain.
The rally in Asia came after U.S. stocks jumped more than 2 percent in their biggest one-day gain since Jan. 2 as investors became more confident that squabbling U.S. politicians would at the very least avert a possible U.S. debt default next week.
"The situation is fluid but it seems like progress is being made on averting the worst-case scenario. But a short-term solution should be met with short-term enthusiasm," analysts at Nomura wrote in a client note.
Republican lawmakers, who have not passed budget funding, on Thursday offered a plan that would extend the U.S. government's borrowing authority for several weeks, staving off a default that could otherwise come as soon as Oct. 17.
While no deal emerged from a meeting at the White House, the two sides appeared ready to end a political crisis that has shuttered much of the U.S. government and pushed the country close to default.
"We are watching this very closely like everyone else. Some people have been going into cash. I wish we were all focusing on matters of economics and earnings, but we are unfortunately trading on this soap opera," said Michael Cuggino, president and portfolio manager at Permanent Portfolio Funds.
In currency markets, the 'risk-on' mood is clearly reflected in the yen, which sagged across the board, particularly against higher-yielding currencies such as the Australian dollar.
The Aussie climbed 0.5 percent to a three-week high of 93.44 yen. For some traders, the Aussie/yen cross is seen as a risk barometer.
The dollar and euro rose to respective 1-1/2 week highs of 98.56 yen 133.45.
The euro was steady at $1.3535, holding the dollar index, which tracks the greenback's performance against a basket of major currencies, under a two-week high set overnight.
Gold nursed losses, struggling to pull away from a one-week low of $1,282.36 an ounce.
Copper put on 0.1 percent to $7,153.00 a tonne, adding to Thursday's 0.6 percent rise, while U.S. crude eased 0.3 percent to $102.70 a barrel, following a 1.4 percent rally.
Traders warned the U.S. fiscal crisis remained fluid and any setback in resolving it could see markets quickly turn tail.
"In the interim, fourth-quarter GDP will surely feel the adverse effects from the slowdown in economic activity and the lack of transparency with respect to economic data releases," said Bonnie Baha, senior portfolio manager at DoubleLine Capital in Los Angeles.
"As a result, under the current set of circumstances, the prospect of a QE tapering is almost certainly off the table for 2013," she added, referring to the Federal Reserve's bond-buying stimulus programme known as Quantitative Easing.