Asian stocks edged up as Chinese consumer price data soothed fears over inflationary pressures building in the world's No.2 economy, but the mood was cautious after Western central banks failed to offer any fresh stimulus plans to revive their sputtering economies.
The US dollar eased against a basket of currencies and US Treasuries slipped as markets reacted coolly to a $US447 billion jobs package plan from US President Barack Obama, who faces a fierce battle to win over Republicans which could revive fears of political paralysis in Washington.
Global markets have been dominated in recent weeks by fears of a US relapse into recession and Europe's snowballing debt crisis. Citigroup analyst Jonathan Stubbs said in a note on Friday that "recession appears to be a more likely outcome now in Europe and/or the US than 3-6 months ago".
Worries about the darkening outlook for the developed world prompted Asian central banks including South Korea and Indonesia to hold interest rates steady on Thursday, following similar moves by Australia, Canada, Japan and Sweden this week.
China's annual inflation moderated slightly to 6.2 per cent in August from July's three-year high, in line with market expectations and raising expectations that Beijing too will hold off from further policy tightening which could dampen its demand for commodities and other imported materials.
The MSCI's broadest index of Asia Pacific shares outside Japan rose 0.3 per cent, with the biggest regional gains in Australia and Taiwan , both heavily influenced by demand from China.

Despite gains in the last few sessions, the ex-Japan is still down more than 12 per cent from its late July highs after fears about the US economy and Europe sparked a global market rout.
Japan's Nikkei edged up 0.1 per cent, hanging on to two days of gains before settlement of September futures and option contracts.
US S&P futures rose 0.5 per cent, pointing to a stronger opening on Wall Street.
Policy stimulus
The European Central Bank on Thursday discussed downside risks to the euro zone's economy, while US Federal Reserve Chairman Ben Bernanke said in a speech that authorities would do all they can to boost growth and employment.
But both steered clear of announcing any fresh steps, disappointing some investors.
Wall Street's main indexes closed down around 1 per cent, with banks the biggest decliners, after Bernanke gave no indications of new stimulus measures to support the flagging economy.
After the Wall Street close, Obama announced a much larger-than-expected package of tax cuts and government spending that will be critical to his re-election chances.
"To some extent, this was largely in line with the chatter we heard before it's release. It may even be a bit smaller than needed given the gravity of the problem," said Omer Esiner, senior market analyst at Commonwealth Foreign Exchange in Washington.
"And at the end of the day, it depends on what the finished product will be. A lot of this will be chopped up before it is passed. We've seen a lot of political paralysis in Washington."
Investors' focus will now turn to a meeting of G7 finance chiefs later on Friday, with the falterting global recovery and euro zone debt crisis likely to be the issues of the day.
Euro nears two-month low
The dollar index eased 0.2 per cent, while US Treasuries traded in Asia slipped, giving back some of the previous day's rally.
The euro traded around $US1.3930, coming off two-month lows of $US1.3884 after the ECB's warning over the economic outlook squashed any expectations of a rate hike.
Gold, propelled to a series of records in recent months due to its appeal as both a safe haven and hedge against inflation, fell around 0.4 per cent to about $US1860 an ounce, after jumping 3 per cent in the previous session.
Oil, which had dipped on Thursday as the dollar rose making it more expensive for holders of other currencies, edged higher, with US crude futures up 0.3 per cent around $US89.35 a barrel and Brent crude up nearly 30 cents and $US114.84.
"The question for the oil market is on demand destruction and how confident the consumer is, both of which are very uncertain," said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong.
"If European and US policymakers can find some compromise and willingness to work together before economics force their hand, then that is bullish for oil. But I think we will probably see the market grind sideways."
Reuters