HONG KONG, Sept 29 - The dollar hit an eight-month low, driving gold to a lifetime high, while Asian stocks rose on rising expectations the U.S. Federal Reserve will act again to help the struggling economy. Mounting speculation the Fed could embark on a second round of quantitative easing (QE) knocked the dollar to a five-month low against the euro and a two-year trough against the Australian dollar. Against a basket of currencies, the dollar extended its losses to hit an eight-month low. The dollar also looked vulnerable against the yen, hitting its lowest since Japan intervened to sell the yen two weeks ago to drive the dollar up from a 15-year low. Spot gold rose above $1,313 an ounce 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. Silver surged to a 30-year high as exchange-traded fund holdings jumped to another record while a firm yuan raised hopes of more buying from gold consumers in China. The MSCI index of Asia-Pacific stocks outside Japan rose about 0.7 percent, poised for its biggest monthly gain since July 2009. Japan's Nikkei average clawed up 0.7 percent on window-dressing before the end of Japan's financial first half, but it pared earlier gains as the yen's strength revived. An additional boost came from a poor December outlook in the Bank of Japan's "tankan" survey of business sentiment, which some market players said could increase expectations the central bank will discuss easing monetary policy further at a meeting next week. "The 'tankan' was as expected, showing improvement in the short term and a gloomy outlook going forward. That only increased expectations for further easing by the Bank of Japan," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co. "But more gains in the market were limited because the yen persistently remained on the strong side." Exporters, including Canon Inc and Sony Corp rose, but Nintendo Co fell after the game maker said its launch of a 3D-capable version of its DS handheld game console would be in February in Japan and March in the United States, missing the crucial holiday season. Elpida Memory Inc surged 8 percent after the company said it would start mass production of advanced DRAM chips in December, putting it ahead of bigger rival Samsung Electronics in technology. Hong Kong stocks rose 1.2 percent to an eight-month closing high, driven by buying of index heavyweights ahead of the expiry of futures settlement contracts, and underpinned by gains on Wall Street. Shanghai stocks ended flat. A rise in HSBC's China Purchasing Managers' Index to a five-month high in September pointed to renewed, though moderate, momentum in the vast industrial sector that is the backbone of China's economy. Australian stocks gave up early gains to close down 0.5 percent as banks, top global miner BHP Billiton and Australia's biggest phone company, Telstra Corp, lost steam. Banks came under pressure on worries about demand for mortgages, after data showed sales of new homes in Australia fell in August for the fourth month in a row. Shares in South Korea gained more than half a percent, hitting a 28-month high, led by rallies in key technology issues such as Samsung Electronics. Technology stocks, including Samsung Electronics and LG Display, jumped after a prolonged underperformance against the broader market. "Tech shares have seen quite substantial losses for the past several weeks, and investors are finding them attractive at their current levels," said Lee Ka-keun, an analyst at Hana Daetoo Securities. Taiwan stocks rose 0.6 percent to an eight-month closing high, led by flat panel maker AU Optronics, amid easing concerns of a possible second global slowdown. Shares in Singapore rose 0.3 percent, but Indian stocks shed 0.7 percent. Oil rose, supported by a weaker dollar, strong Chinese manufacturing data and a fall in U.S. crude and winter fuel stocks, easing a surplus that has weighed on the market for months.

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