By Shinichi Saoshiro
TOKYO (Reuters) - Asian stocks edged higher on Thursday as fresh signs of resilience in the U.S. economy offset some of the gloom over a weakening global outlook, while the euro wallowed near two-year lows before a much-anticipated European Central Bank meeting.
Tokyo's Nikkei rose 0.8 percent, with sentiment buoyed by media projections suggesting a strong win for Japanese premier Shinzo Abe's coalition at the Dec. 14 election. A victory for Abe could lead to a new mandate for his "Abenomics" economic policies.
That contrasted with the gloom in the euro zone, with a survey showing business activity grew less than expected in November and raised the spectre of another economic contraction.
The euro struggled as a result. It fetched $1.2308 <EUR/USD> after falling to a two-year low of $1.2301 overnight on the view that the ECB will be forced to inject even more stimulus to prop up the tottering euro zone economy.
While a full-blown quantitative easing program after Thursday's policy review is seen as unlikely, some believe the ECB may lay the groundwork for a such move early next year.
"The prospect of a sovereign bond buying program is looking ever more likely. It probably won't begin tonight (however, we see further corporate bond buying tonight)," Evan Lucas, market strategist at IG in Melbourne, wrote in a note to clients.
"The prospect will only increase sentiment towards European equities."
Speculation that the ECB will pave the way on Thursday for sovereign debt purchases has pushed down euro zone debt yields across the board. The Italian 10-year yield <Italy 10-Year Bond Yield> fell to a record low below 2 percent overnight.
The dollar rose to a new seven-year high of 119.910 yen <USD/JPY> after the upbeat U.S. data further highlighted the diverging monetary policy paths of the United States and Japan.
Crude oil markets remained choppy after last Thursday's decision by OPEC not to cut supply sparked volatility and a sharp price fall.
U.S. crude was little changed at $67.37 a barrel after rising the previous day on data showing a surprise tumble in U.S. inventories. U.S. crude has lost more than 30 percent so far this year, touching a seven-year low of $63.72 on Monday. [O/R]
Gold clung to gains after catching a lift overnight on firmer oil prices. Spot gold was steady at $1,208.50 an ounce after gaining 0.9 percent the previous day. [GOL/]
(Editing by Shri Navaratnam)