Rising oil prices lifted European energy stocks on Friday while most financial markets were focused on an upcoming speech by U.S. Federal Reserve Chairman Ben Bernanke.

Euro zone government bond were flat. The Japanese yen fell to a record low against the euro after disappointing inflation data.

Bernanke was the focus for most investors, with a speech due on global integration at 1400 GMT in Jackson Hole, Wyoming.

With the Fed having paused in its two-year rate tightening cycle, markets have become eager for hints about whether the next move is up or down and when it will be.

Bernanke is unlikely to be more dovish. Generally he will leave options open and he doesn't want to rule out a rate hike by the end of the year, said Adarsh Sinha, currency strategist at Barclays.

In the meantime, European equity markets moved up as firm metals and energy prices supported mining and oil stocks.

Oil prices climbed above $73 a barrel as a storm brewed in the Caribbean with the potential to reach the Gulf of Mexico next week, creating worries over U.S. production.

U.S. crude was up 96 cents at $73.32 a barrel and London Brent rose 90 cents to $73.58.

The FTSEurofirst 300 index of leading European shares was 0.2 percent higher.

Earlier, Japan's Nikkei ended 21.96 points lower at 15,938.66. The broader TOPIX index ended down 0.20 percent at 1,619.81.


On currency markets, the yen hit an all-time low against the euro of 149.80 yen and the yen fell against the dollar disappointing consumer prices data reinforced expectations for low interest rates in Japan.

The dollar was calm elsewhere as investors awaited Bernanke.

Japan's core CPI rose 0.2 percent in July from a year earlier, against expectations for a 0.5 percent rise and cementing expectations the Bank of Japan will take time raising rates, after raising them in July for the first time in 6 years.

The dollar was up at 117.14 yen. The euro was essentially flat against the dollar at $1.2773.

Euro zone government bond yields were flat. The 10-year bond yield was at 3.804 percent.