Asian stocks rose on Friday as strong earnings from economic bellwethers such as Caterpillar tempered concerns about a global slowdown, while the euro steadied ahead of European bank stress test results later in the day.

Results of the tests on 91 European lenders are eagerly awaited by markets whose skepticism about the sector has driven up funding costs and weighed on share prices since Greece's debt crisis triggered fears that the euro zone could unravel.

The euro jumped more than 1 percent against the dollar on Thursday to around $1.29 and European bank stocks rose across the board in a sign that investors are starting to hope the worst is behind the region's financial industry.

But a lack of details about the terms of the tests and earlier divisions among European Union members over how much information will be made public has made investors wonder if the assessments would be tough or transparent enough.

Ironically, word of a few failures in fiscally weaker countries such as Portugal or Spain could actually boost confidence in the vigorousness of the process. The results are expected around 12 p.m. ET.

Buoyed by robust U.S. earnings reports, Asian stocks outside Japan <.MIAPJ0000PUS> rose 1.1 percent and looked set to post a 2 percent gain on the week, with Asia ex-Japan equity funds seeing strong inflows.

Commodity-related stocks <.MIAPJMT00PUS>, the top performers in Asia this week, led gains after oil and metals prices rose overnight. Shars of information technology and healthcare companies also saw strong demand.

Japan's Nikkei <.N225> looked poised to snap a 5-day losing streak, rising 1.8 percent on U.S. earnings, short-covering and a weaker yen.

The market built on upbeat sentiment after European stocks were helped by expectations that the stress test results probably won't negatively impact markets, and there were also good earnings announcements by U.S. companies, said Masaru Hamasaki, senior strategist at Toyota Asset Management.

Major U.S. share indexes rose as much as 2.7 percent overnight as robust quarterly results from construction and mining equipment maker Caterpillar , 3M and other U.S. multinationals suggested the global economy may be on stronger footing than previously thought.

A string of weak U.S. economic data in recent weeks and worries that Europe's debt crisis could derail its already fragile recovery have put heavy pressure on markets, but there are signs that investors are slowly returning to riskier assets.

Emerging markets equity funds retained some of their momentum from the previous week, with Asia ex-Japan Equity Funds taking in over $800 million for the second week running, according to data from fund-tracking firm EPFR Global.

Crude oil futures steadied above $79 a barrel after jumping to 11-week highs overnight as a potential storm threatened production in the Gulf of Mexico.

Shanghai copper also rose, chasing London which climbed to near two-month peaks, spurred by a weaker dollar and positive economic data on both sides of the Atlantic.

(Editing by Kim Coghill)