Asian stocks rose for a fourth day on Friday on optimism that the world economic recovery was on track despite Europe's debt woes, while the euro was steady after a rally the previous day.

European equities were set to inch higher, with financial spreadbetters expecting Britain's FTSE 100 <.FTSE> to open 6-8 points higher, Germany's DAX <.GDAXI> to open 1-6 points higher, and France's CAC-40 <.FCHI> to open 6-17 points higher.

The MSCI index of Asia Pacific ex-Japan stocks <.MIAPJ0000PUS> rose nearly 1.6 percent, led by energy and technology plays.

Asian stocks have gained 3.7 percent in the past four days, but are still down nearly 8.7 percent so far this year.

There was little impact from a spate of fresh Chinese data.

The data showed China's inflation accelerated to a 19-month high in May while industrial output and fixed-asset investment growth moderated, sending mixed signals about the temperature of the world's third-largest economy.

Japan's Nikkei average climbed nearly 2 percent, helped by a halt in the yen's advance against the euro and signs of health in the euro debt market.

Spain sold 3.9 billion euros of a 3-year benchmark bond seeing strong demand, a positive sign for investors worried about appetite for debt from struggling European nations. The euro rose 1.2 percent against the U.S. dollar, trading above $1.21.

Investors also breathed a sigh of relief after European Central Bank President Jean-Claude Trichet said three-month emergency loans to banks would continue until September and when Germany's high court rejected efforts to block German guarantees for euro zone financial aid.

Funds have started to lean toward risk-taking after all-out risk-reduction behavior seen in mid- to late May, and domestic investors are following suit, said Tsuyoshi Segawa, an equity strategist at Mizuho Securities.

U.S. STOCKS RALLY

U.S. stocks rallied nearly 3 percent on Thursday, a day after a late-day sell-off that had reversed strong gains in what has been a volatile month on Wall Street. That has prompted questions over whether expectations of an economic recovery have been overly optimistic.

Fears over the global economy eased after China on Thursday confirmed exports jumped nearly 50 percent in May from a year ago, fanning investors' optimism that the global economy is on the recovery path despite the European debt crisis.

Investors have dumped riskier assets, including global stocks and high-yielding currencies, in recent weeks.

Investors slashed their equity holdings and poured money into U.S. and emerging market bonds and commodities last week on lingering fears that global growth will be hit by Europe's debt problems, EPFR Global said on Friday.

Equity funds saw outflows of $2.61 billion in the week to June 9, while bond funds took in $3.8 billion in fresh money, the research firm said in a report.

The euro, meanwhile, hovered near $1.21, a day after rallying about 1.3 percent due to the positive news from Spain and China.

The euro faced stiff resistance in the $1.2135-55 area.

The European single currency has shed 1.5 percent this month and nearly 16 percent this year, driven ever lower by fiscal concerns in the euro zone.

Against the yen, the euro retreated below 111.00 yen after pushing back above that level for the first time in a week.

Meanwhile, investors took a lack of surprises in the Chinese data to book gains in the Australian dollar, which eased to $0.8444 but was still well above a low of $0.8082 seen at the start of the week.

Spot gold rebounded slightly to $1,220 an ounce on short covering after falling around 1 percent in the previous session as the Wall Street rally curbed safe-haven demand.

U.S. crude futures stood steady after closing at a four-week high above $75 a barrel a day earlier on the back of a Wall Street rally and a rosier oil demand forecast by the International Energy Agency.

(Editing by Ron Popeski)

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