Asian stocks rose on Friday, trying for a fifth day of gains, as hopes the global economy could not get any worse kept investors buying riskier assets, though U.S. and Japanese data left some doubts lingering.

U.S. crude prices took a breather, trading around $54 a barrel, after climbing global equity markets and a rosy outlook for demand from China broadly lifted raw materials prices, particularly industrial metals.

Investors appeared to be latching on to the view that mixed economic data, as opposed to completely horrible, was enough motivation to pick up stocks at low valuations and lock in yields on heavily discounted bonds.

They also have been heartened by further clarity on rescue efforts for U.S. banks, though whether any policy would ultimately be successful in stimulating global demand in the near term was anyone's guess.

Asia has a lot to gain with the U.S. looking better. Now whether the U.S. really is better is another question, said Tim Rocks, equity strategist with Macquarie Securities in Hong Kong.

In China you have some evidence stimulus policies are working, but whether that's enough and whether we take another leg down is still unclear.

Japan's Nikkei share average <.N225> rose 1 percent after earlier touching a 2-1/2-month high. Car makers and exporters of technology, such as Honda Motor Co <7267.T> and Canon Inc <7751.T>, were among the biggest boosts to the index.

The MSCI index of Asia Pacific stocks outside Japan <.MIAPJ0000PUS> edged up 0.5 percent, heading for the largest weekly rise since early November.

A sanguine outlook for demand and higher metals prices supported mining stocks and provided the main thrust to Australia's benchmark S&P/ASX 200 index <.AXJO>, which climbed 0.8 percent.

BHP Billiton gained 0.4 percent while rival Rio Tinto outperformed the broad market, racing up 4.1 percent.

We've hit the bottom, we're making our way up, said Stuart Smith, a Bell Potter Securities private client advisor in Australia.

ARE WE REALLY AT THE BOTTOM?

The R word used more frequently among fund managers and dealers has been recovery rather than recession, especially with the MSCI all-country world index <.MIWD00000PUS> climbing more than 20 percent in the last three weeks.

However, the picture painted by economic data was far from clear.

A gauge of U.S. capital spending unexpectedly spiked in February, though the number of workers continuing to collect state unemployment benefits climbed to a record.

In Japan, the world's second largest economy, contracting consumer prices beckoned deflation and deepening recession while a larger-than-expected fall in February retail sales were more signs of gloom.

We expect negative numbers for at least the rest of this year due to a combination of weaker energy prices and a deterioration in the output gap. Japanese companies are still producing more than consumers want to buy, said Akira Maekawa, senior economist with UBS in Tokyo.

Dealers in the Japanese government bond market were more concerned with the Nikkei's persistent rise, which kept a lid on the bond market. The 10-year JGB future was down 0.03 point after earlier hitting a one-month low.

The yield on the benchmark 10-year U.S. Treasury note was steady at 2.75 percent. Overnight, Treasuries rose in a relief rally after a auction of seven-year notes saw respectable demand, cooling fears of a failed auction like Britain had earlier in the week.

In New Zealand, government bond yields eased slightly after a surging the previous day which prompted the central bank to deny talk it was holding an emergency meeting over the two-week long selloff in the debt market. The key five-year swaps rate also eased slightly to around 4.99 percent from 5.02 percent.

The ABF pan-Asia government bond exchange traded fund <2821.HK> was up 1 percent.

With the fiscal year end approaching, Japanese businesses were bringing some overseas cash home, putting upward pressure on the yen. The dollar was down 0.3 percent to 98.38 yen.

The euro was up 0.2 percent to $1.3554, still up more than 5 cents since the Federal Reserve said it would greatly increase purchases of long-term securities to support the economy.

U.S. light crude slipped 0.9 percent to $53.85 a barrel on Friday, after having touched a 2009 high in the previous session on stronger equities, which the market hopes signal a recovery in energy demand down the road.

Japan Australia China Nikkei 225