NEW YORK/SINGAPORE - Asian stocks inched up on Friday ahead of key US payrolls data as investors considered prospects that a broader trade war could be averted, while the yen hit its highest in nearly two months on rising odds of more rate hikes in Japan this year.

In a week that started with US President Donald Trump kicking off a trade war, first by imposing tariffs on Mexico and Canada and then pausing them, investors have been hesitant in making major moves as threatened duties on China were implemented.

Overnight, US stocks were mixed at the end of a choppy session as investors assessed a spate of earnings, with shares of Amazon slipping in extended trading on weakness in the retailer's cloud computing unit and soft forecast.

On the economic front, jobless claims, layoffs and labor costs/productivity provided a prologue to Friday's keenly anticipated January employment report, with the data likely to show the impact of wild fires in California and cold weather across much of the country.

Nonfarm payrolls is expected to have increased by 170,000 jobs last month after surging 256,000 in December, a Reuters poll of economists showed.

"Markets could face some volatility around the data if it beats expectations, but it won't change the path of the FOMC policy as more data will be needed," said Anderson Alves, a trader with ActivTrades.

Markets are pricing in 43 basis points of easing this year from the Fed with a rate cut in July fully priced in as policymakers are in no hurry to start the rate-cutting cycle again.

While political uncertainties kept investors wary, fears have eased that Trump's approach to tariffs could escalate into a global trade war.

"We are witnessing a resilient economy ... against a backdrop of geopolitical concerns, and an expectation of some sort of chaos down the road," said Oliver Pursche, senior vice president at Wealthspire Advisors in New York.

Rising yen

The Japanese yen has been on a tear this week buoyed by safe-haven flows as well as rising expectations of the Bank of Japan increasing interest rates this year, with markets pricing in 34 basis points of hikes for the year.

The yen touched 150.96 per dollar in early trading, its strongest level since December 10. It last fetched 151.65. The currency is headed for an over 2 percent rise against the dollar this week, its strongest weekly performance since late November.

Sterling was steady at $1.2434 after dropping 0.5 percent on Thursday as the BoE cut interest rates by 25 basis points but warned it would be cautious going forward, in the face of a potential inflation uptick and geopolitical worries.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was at 107.7, with the euro little changed at $1.0386.

Oil prices rose marginally in early Asian trade but were on track for a third straight week of decline.

Gold prices steadied on Friday near record-high levels, and were headed for their sixth successive weekly gain driven by a risk-off flight to safety.