Asian stocks rose on Friday and were on track for their best weekly performance in two months after softer U.S. inflation data reduced expectations of a near-term Federal Reserve rate hike. MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.28% and was set for a 2.7% weekly rise, while Japan's Nikkei climbed 1.5% and was heading for an over 5% weekly gain. Investors largely looked past the lack of progress in talks tied to the war in the Middle East, although analysts warned that the rally remains vulnerable to oil-driven inflation risks. Brent crude steadied at $87.03 a barrel after Thursday's drop and was still set for a 4% weekly gain, helped by U.S. threats to intensify economic pressure on Iran, including extending a naval blockade. The yen traded at 159.40 per dollar, close to the 160 level that traders see as a possible trigger for intervention by Tokyo, as markets also weighed whether the Bank of Japan may deliver a rate hike next month. Gold fell 0.8% to $4,313 an ounce as traders took profits, while CME FedWatch showed markets pricing a 35% chance of a Fed hike next month, down from 55% a week earlier.