By Shinichi Saoshiro
TOKYO (Reuters) - Asian stocks rose on Thursday amid fresh signs of resilience in the U.S. economy, while the euro wallowed near two-year lows before a much-anticipated European Central Bank meeting that could open the door to more stimulus.
Tokyo's Nikkei climbed 0.8 percent to near 7-1/2-year highs, 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" policies to revive the economy.
"There's activity in anticipation of extremely promising conditions being born," said Hiroyuki Nakai, chief strategist at Tokai Tokyo Research Center Co in Tokyo.
MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) rose 0.4 percent, while Australian shares (AXJO) were up 0.9 percent.
The Shanghai Composite Index (SSEC) surged 2.3 percent as the rally on expectations that China would implement further stimulus measures showed no signs of abating.
Private payrolls and services sector data released on Wednesday underscored the U.S. economy's resilience.
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 $1.2307 <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 programme after Thursday's policy review is seen as unlikely, some believe the ECB may lay the groundwork for such a move early next year.
"The prospect of a sovereign bond buying programme 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."
Spreadbetters forecast a higher start for European stocks, with Britain's FTSE (FTSE) and Germany's DAX (GDAXI) seen opening 0.2 percent higher and France's CAX (FCHI) rising 0.1 percent.
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 119.955 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 futures
Gold's advance was halted as the dollar's strength pared the metal's allure as an alternative investment. Spot gold
(Additional reporting by Thomas Wilson in Tokyo; Editing by Shri Navaratnam and Jacqueline Wong)