HONG KONG, Dec 2 (Reuters) - Gold surged to an all-time high above $1,200 an ounce on Wednesday, hitting a record for a second straight day, and Asian stocks advanced as investors chased riskier assets offering higher returns.
Spot gold rose 1 percent to $1,208.70 amid a broad rally in commodities on expectations of rising global demand, fueled by upbeat U.S. home sales and analysts' forecasts that China's economy could grow by 10 percent or more this quarter.
Copper touched its highest level in 15 months.
Gold was also supported by weakness in the U.S. dollar, which was again on the defensive while the euro and high-yielding currencies extended gains as investor risk appetite showed little sign of waning as it usually does heading into the year end.
The dollar was flat against a basket of major currencies, while the yen came off earlier lows amid disappointment that emergency steps announced the Bank of Japan on Tuesday, primarily short-term funding for banks, did not go further to tackle deflation or help alleviate upward pressure on the yen.
The yen was trading at 86.91 to the dollar, up from Tuesday's low of 87.54. It has gained more than 4 percent this year, raising worries that exports are growing less competitive, threatening to tip Japan back into recession.
Some analysts had expected the BOJ to signal a return to a narrow form of quantative easing seen in 2001-06, when it slashed interest rates to zero and flooded markets with cash in a bid to spur growth.
"The BOJ squandered any possible 'announcement effect' that would have bolstered the attempts to weaken the yen," said Glenn Maguire, chief economist at Societe Generale in Hong Kong. "The entire episode seems to have the notion of 'rushed' all over it."
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