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* Dlr weak on easing talk, stokes yen intervention fears
* Asian stocks at 2-yr high; led by materials, technology
* HSBC China PMI at 5-mo high, points to industrial revival
* Gold hits record high, eyes on Fed's next move
* Japan's Nikkei rises on quarter-end window-dressing
By Vikram S.Subhedar
HONG KONG, Sept 29 (Reuters) - The dollar hit an
eight-month low, driving gold to a record high, on rising
expectations the Federal Reserve will act again to help the
struggling economy while new evidence of China's robust health
lifted European stocks.
Europe's major equity markets rose on Wednesday, with the
pan-European FTSEurofirst 300 <> index of top shares up
0.6 percent in early trade, making up for Tuesday's decline,
spurred by news of a dip in U.S. consumer confidence.
Gold rose as the Fed and Bank of Japan look to pump more
funds into markets via bond purchases and other measures to
help their struggling economies.
"The backdrop for the dollar continues to deteriorate,"
JPMorgan said, advising clients to seize any bounce in the
dollar as a chance to sell.
"The increased focus on QE (quantitative easing) and the
break of several key dollar support levels maintained the
overall bearish bias."
Japanese government bond futures hit a seven-year high
while U.S. Treasury yield curve moved on Tuesday to its
flattest since early September over expectations of further
monetary easing by both central banks. []
Such expectations were reinforced by a fall in U.S.
consumer confidence to its lowest since February and a
worsening outlook in Bank of Japan's quarterly tankan survey of
major companies.
Stock markets, however, found support in a rise in HSBC's
China Purchasing Managers' index to a five-month high in
September, which pointed to renewed, though moderate, momentum
in China's vast industrial sector. []
Asian stocks outside Japan <.MIAPJ0000PUS> rose 0.6
percent, poised for their biggest monthly gain since July 2009,
up 11.8 percent, in what is historically one of the worst
months for stocks.
Japan's Nikkei <> closed up 0.7 percent, helped by
quarter-end window dressing and expectations that the BOJ will
respond to the worsened outlook from Japanese manufacturers by
further easing its policy when it meets on Oct. 4-5.
The closely watched tankan survey showed confidence
improved for a sixth straight quarter but firms turned negative
on the outlook, possibly a sign of growing concerns that a
strong yen could derail the fragile economic recovery.
[]
WAITING FOR THE FED
The dollar index <.DXY> dipped to as low as 78.856, the
lowest since early February, hurt by recent speculation that
the U.S. Federal Reserve may embark on a second round of
quantitative easing later this year.
The weak dollar pushed gold to an all-time high and silver
to a 30-year high as ETF holdings hit another record.
Gold <XAU=> rose to $1,310.10 an ounce by 0630 GMT -- its
eighth record-high session this month.
U.S. consumer confidence fell to its lowest level in seven
months, the latest in a series in data that give a mixed signal
on the economy, with unemployment levels at 26-year highs and
access to credit still tight. []
The Federal Reserve said last week it was prepared to put
more money into the economy, if needed, to stimulate the
recovery and avoid deflation.
The Fed is probably preparing a fresh round of quantitative
easing measures to announce at the end of its Nov. 2-3 meeting,
hedge fund adviser Medley Global Advisors said in a report on
Tuesday, a market source told Reuters. [].
The Wall Street Journal reported that the Fed is also
weighing a more open-ended, smaller-scale bond buying
programme.
(Additional reporting by Masayuki Kitano and Charlotte Cooper
in TOKYO; Editing by Tomasz Janowski)
