Asian stocks up after China inflation moderates

Asian stock markets rose on Friday amid news China's inflation moderated slightly, brushing aside a sullen mood on Wall Street after Fed chairman Ben Bernanke offered no immediate support for the ailing U.S. economy.

Oil prices rose toward $90 a barrel as investors bet a new U.S. jobs package unveiled by President Barack Obama will help boost demand for crude. The dollar weakened against the yen and the euro.

Japan's Nikkei 225 index bounced back from a lower opening - up 0.1 percent to 8,801.11. The government reported that the country's economy contracted in the April-June quarter at an annual rate of 2.1 percent, worse than the initial estimate of 1.3 percent.

But the result was not unexpected, given the scope of the damage done by the March earthquake and tsunami that destroyed many of northeastern Japan's factories and businesses. Economists expect the world's No. 3 economy to pick up in the months ahead.

South Korea's Kospi was 0.6 percent lower at 1,836.42. Australia's S&P/ASX 200 jumped 1 percent to 4,228.40. Mainland Chinese shares rose after the government said consumer prices had moderated in August. Prices rose 6.2 percent from a year earlier, easing from a 37-month high of 6.5 percent in July.

That raised the possibility of China easing its tight monetary policies - or at least putting further interest rate hikes on hold - and helping it to ward off the impact of a slowing global economy. The Shanghai Composite Index rose 0.7 percent to 2,517.16.

On Wall Street, stocks closed sharply lower Thursday after Bernanke in a speech closely watched by investors said the Fed will consider a range of steps at its Sept. 20-21 meeting.

The Dow Jones industrial average lost 1 percent to 11,295.81. The Standard & Poor's 500 index fell 1.1 percent to 1,185.90. The Nasdaq composite shed 0.8 percent to 2,529.14. Each index had posted gains earlier in the day.

Also Thursday, President Barack Obama, looking to jolt the U.S. economy, proposed a $447 billion plan for creating jobs in a nationally televised speech before Congress late Thursday. Obama will likely have a hard time getting much of his plan through Congress since Republicans control the House of Representatives.

Concerns about the U.S. economy have pushed stocks lower each month since April. Many traders now say the stock market is pricing in the assumption that the economy is in a recession, meaning limited job growth and weaker corporate profits.

In energy trading, benchmark oil for October delivery was up 40 cents to $89.45 in electronic trading on the New York Mercantile Exchange. Crude fell 29 cents to finish at $89.05 on Thursday.

In London, Brent crude for October delivery was down 20 cents at $114.35 on the ICE Futures exchange. In currencies, the dollar slipped to 77.49 yen from 77.54 yen late Thursday in New York. The euro was higher at $1.3924 from $1.3876.

Credit Agricole CIB said that the debt crisis swirling around smaller European countries was finally being felt by the euro, which had be showing persistent strength against the greenback.

The euro "broke below the psychologically important 1.40 level as peripheral tensions are finally beginning to take their toll on the currency," the bank said in a research note.