US fiscal cliff 'only a bump' for Asia

The US still faces a political stalemate over how to reduce its budget deficit.

Lawmakers are trying to strike a "fiscal cliff" deal by the end of the year to avoid steep tax rises and spending cuts coming into effect in January.

Robert Browne, chief investment officer at Northern Trust, said if a deal is not reached the US economy will face a temporary contraction.

However, he said it will only be a "significant bump" for Asian investors, rather than a "bullet".