* Gold hits record high for a second straight day
* Asian stocks advance on rising risk appetite
* Economic recovery expectations spur commodities
* Yen heads back up as latest BOJ steps disappoint
By Susan Fenton
HONG KONG, Dec 2 (Reuters) - Gold scaled another all-time high above $1,200 an ounce on Wednesday, helped by a weaker dollar as it lost some of its safe-haven appeal due to upbeat U.S. home sales and renewed appetite for riskier assets.
Asian stocks advanced as investors chased higher returns confident that Dubai's debt woes, which sparked a sell-off last week, will be contained. European and U.S. equity markets were set for a flat opening.
Spot gold rose to as high as $1,210.15 after pushing past the $1,200 level for the first time in New York trade, amid a broad rally in commodities on expectations of rising global demand, fuelled by strong U.S. home sales report and analysts' forecasts that China's economy could grow by 10 percent or more this quarter.
Copper touched its highest level in 15 months.
The dollar was again on the defensive while the euro and high-yielding currencies extended gains as 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 by 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 BOJ's new market operation may help financing toward the year-end, but it may be difficult to push up the economy and inflation expectations," said Satoru Ogasawara, an economist at Credit Suisse in Tokyo.
Banking Minister Shizuka Kamei said he was deeply unhappy with the BOJ's action, calling the central bank "sleepy-headed".
The yen was trading at 86.99 to the dollar, up from Tuesday's low of 87.54. It has gained more than 4 percent this year, raising concerns 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 form of quantitative easing seen in 2001-06, when it slashed interest rates to zero and flooded markets with cash in a bid to spur growth.
CAR MAKERS GET A LIFT
Investors pumped money back into equities across most of Asia as fears eased about potential global contagion from Dubai's debt repayment problems and after data showed pending U.S. home sales reached a three-and-a-half year high in October.
The MSCI index of Asia Pacific stocks traded outside Japan was 1.3 percent higher while the Thomson Reuters index of regional shares was up 0.6 percent.
"With investors more assured that fears about Dubai are continuing to ease, coupled with alleviating economic concerns on the back of solid U.S. data, markets are making a more meaningful rebound today," said Choi Seong-lak, an analyst at SK Securities in Seoul where shares jumped 1.4 percent.
Japan's Nikkei share index rose 0.4 percent to a two-week closing high but underperformed much of Asia on disappointment over the BOJ actions and the country's shaky economic outlook, while Japanese government bond futures fell.
A Reuters Tankan survey showed Japanese manufacturers' confidence gauge was at a one-year high but still reflecting pessimism with the pace of economic recovery expected to slow.
The commodities rally lifted shares in Australia where copper miner Kagara Ltd rallied 7 percent and gold miner Newcrest Mining jumped 5 percent, while the benchmark index climbed 0.9 percent.
Shares of Asian car makers also gained after data showed U.S. car sales rose in November, another sign that the world's biggest economy is recovering.
Japan's Nissan Motor, which reported a 31 percent jump in U.S. sales last month, saw its share price rise 2.5 percent. Shares of Toyota Motor Co, the world's biggest car maker and best-selling brand in the U.S., gained 1.1 percent.
Oil prices were flat at around $78.50 a barrel, recovering after slipping in early Asian trade on data showing U.S. crude stocks rose much more than expected last week.
"Inventories are still high while demand is relatively subdued, but the downside is limited ... when prices decline it attracts new buying supported by the view on macro economic recovery," said David Moore, commodities strategist at Commonwealth Bank in Sydney. (Additional reporting by Nick Trevethan in SINGAPORE, Tetsushi Kajimoto in TOKYO and Jungyoun Park in SEOUL; Editing by Tomasz Janowski) (susan.fenton@thomsonreuters.com; +852 2843 6367; Reuters Messaging: susan.fenton.thomsonreuters.com@reuters.net) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))