* Gold hits record high amid dollar slide
* Asian stocks edge higher;Japan boosted by weak yen
* Yen extends fall;quantitative easing and intervention
looms
By Umesh Desai
HONG KONG, Dec 3 (Reuters) - Gold struck another peak on
Thursday because of its investor appeal as a safe asset and
Asian stocks looked past Wall Street's weak finish to eke out
gains.
The yen slipped amid growing market talk that Japan may
step up quantitative easing to battle deflation.
Gold surged to a new high of $1,224.65 an ounce, while the
yen <JPY=> extended its losses, falling to 87.80 per dollar, on
speculation Japan could be embarking on another round of
quantitative easing, while the Japanese Prime Minister's
concerns about the currency's rise stoked intervention hopes.
Asian shares were lead by strong gains in Japan and South
Korea as investors ignored the broad weakness in U.S. stocks
and kept buying metals and consumer discretionary industries.
Japan's Nikkei stock average jumped after the yen's fall
boosted exporters and gold's rise propped metal shares, taking
the benchmark further above last week's four-month lows.
The yen <JPY=> continued on a downward spiral after Prime
Minister Yukio Hatoyama said the recent rise could not be left
alone. There was also rising speculation that authorities could
flood the market with funds when the rest of the world was
weighing a way out of easy monetary policy.
It fell to 87.89 yen per dollar, with stop-loss sell orders
triggered around 87.50. The weakness adds to its 0.9 percent
loss in the previous session -- the largest daily drop in six
weeks.
The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> edged up 0.42 percent.
"There is a lot of interest in emerging market equities and
a lot of money is coming out of Europe and the U.S.," said Alex
Boggis, fund manager at Aberdeen Asset Management, which
oversees $240 billion in investments.
"People have got the message they want growth and
protection against a possible U.S. dollar depreciation."
Leading the rise in Asia were materials shares
<.MIAPJMT00PUS>, which were up 0.44 percent, and the consumer
discretionary sector <.MIAPJCD00PUS>, 0.36 percent higher.
Consumer discretionary, information technology and
materials indusrtries are expecting the highest earnings growth
rates over the next 12 months with companies in Taiwan
expecting the maximum gain, a Thomson Reuters Starmine research
report said.
The report is based on latest estimates from top analysts.
In Japan, shares of Mitsubishi Motors <7211.T> soared 17.7
percent to 140 yen after a media report PSA Peugeot Citroen
<PEUP.PA> is in talks to acquire a 30-50 percent stake while
exporters like Canon <7751.T> were lifted by the weak yen.
The yen and the dollar fell further after Bank of America
said it would repay $45 billion of taxpayer bailout funds,
boosting investor confidence and trimming safety bids in those
currencies.
Analysts expect the U.S. dollar's long-term weak outlook to
sustain flows into emerging markets such as Asia ex-Japan.
BNP Paribas said it expects Asia to receive $35 billion in
portfolio inflows in 2010, up from $27 billion in 2009, a year
during which stocks have posted gains of nearly 70 percent.
Gold should remain a beneficiary of the weak dollar story
as the mammoth debt burden facing the United States has
invetsors fleeing to alternative assets.
"Inflation does not look like a great possibility in the
short term but if the U.S. tries to inflate its way out of its
debt issues, then the dollar will weaken and gold will look
better than anything else as a real asset," said Aberdeen's
Boggis.
(Editing by Jan Dahinten)
((umesh.desai@thomsonreuters.com; +852 2843 6935; Reuters
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