Here’s what’s important in the business world this morning:

EU/Japan: European Union foreign ministers say they have agreed to open free trade negotiations with Japan.

Cyprus’ commerce minister Neoklis Sylikiotis, whose country holds the bloc’s rotating chairmanship, says Thursday talks could start in the next few months. They are likely to last about three years.

EU Trade Commissioner Karel De Gucht says an agreement would generate about 400,000 jobs in Europe and boost GDP by 0.8 percent.

The EU is also close to concluding free trade agreements with Canada and Singapore, and is looking at ways to boost trade with the United States, which currently amounts to about €1.8 billion ($2.3 billion) a day.

“Fiscal Cliff”: Hopes that U.S. political leaders may be inching towards a budget deal that will avoid automatic spending cuts and tax increases have given markets a big boost Thursday.

Comments by President Barack Obama and Speaker of the House John Boehner that a deal to avoid a budget crisis could be reached before the year-end helped U.S. markets turn around on Wednesday and that momentum carried through into the Asian and European sessions.

Getting a deal done before the year-end is necessary to avoid the so-called “fiscal cliff” of automatic spending cuts and tax increases that many economists think could push the U.S. economy, the world’s largest, back into recession.

In Europe, the FTSE 100 index of leading British shares was up 0.9 percent at 5,856 while Germany’s DAX rose 0.7 percent to 7,397. The CAC-40 in France was 1.1 percent higher at 3,555.

Wall Street was poised for a solid opening too, with both Dow futures and the S&P 500 futures up 0.6 percent.

Whether the momentum will continue over the coming days could be dependent on how the negotiations go. Past experience suggests that the discussions may go down to the wire.

The focus of attention will likely remain on the U.S., especially now that Greece’s euro partners and the International Monetary Fund have agreed to carry on funding the near-bankrupt country. With an imminent default of Greece off the table, investor worries over Europe have diminished this week.

That’s helped shore up the euro, which is heading back towards the $1.30 mark. It’s up a further 0.3 percent to $1.2987.

Earlier, Japan’s Nikkei 225 index rose 1 percent to close at 9,400.88. Hong Kong’s Hang Seng jumped 1 percent to 21,922.89 and South Korea’s Kospi added 1.2 percent to 1,934.85.

But mainland Chinese stocks extended their slump to a fourth day. The Shanghai Composite Index lost 0.5 percent to 1,963.49, the lowest closing since Jan. 16, 2009. The smaller Shenzhen Composite Index lost 1 percent 743.43.

Oil prices tracked equities higher, with the benchmark New York rate up 62 cents to $87.11 a barrel.

Jobless Claims: Applications for jobless benefits fell by 23,000 for the week ending November 24, bringing the total to 393,000, down from last week’s revised figure of 416,000, the Labor Department announced on Thursday.

The four-week moving average, a “less volatile” figure, increased by 7,500, bringing the total to 405,250, up from last week’s revised average of 397,750.

The Associated Press contributed to this report.