By Sam Byford (Reuters) -Asian stocks were mixed and the yen fell on Friday, capping off a back-and-forth week that saw investors split on how aggressively the Federal Reserve would raise interest rates to tackle inflation. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.1%, and Australia’s AXJO was down 0.72%.

Hong Kong’s Hang Seng index rose 0.35%, but Chinese blue-chip stocks fell 0.1%.Japan’s Nikkei was the major outlier, surging 2.43% to its highest level since January as markets reopened following a national holiday. The yen fell 1.14% and was trading at 133.245 per dollar.

European stock futures gave little indication of major moves for the day ahead. FTSE 100 futures were down 0.01%, with Britain set to report second-quarter gross domestic product later in the day, while Euro Stoxx 50 futures were down 0.03%.

Markets were tentative early this week ahead of key economic data out of the United States. The consumer price index (CPI) report on Wednesday showed inflation was slightly lower than expected in July, while the producer price index (PPI) unexpectedly fell for the first time since April 2020.The slight easing of inflation readings had driven global stocks higher and capped a rising dollar, until a string of Fed speakers put paid to expectations of the central bank going slow on further policy tightening.

“The Fed is going to do what they said, which is whatever it takes to address inflation, so you are seeing some repositioning around that out of U.S. equities,” said Carlos Casanova, senior economist at UBP. The S&P 500 closed down 0.07% and the Nasdaq Composite lost 0.58% overnight, though the Dow Jones Industrial Average rose 0.08%. San Francisco Federal Reserve Bank president Mary Daly said on Thursday that while a 50 basis point rate hike next month “makes sense” given economic data, she’d be open to a bigger hike if necessary. The rate is currently in the 2.25%-2.5% range.

Chicago Fed President Charles Evans said he believed the Fed would likely need to lift its policy rate to 3.25%-3.5% this year and to 3.75%-4% by the end of next year, in line with what Fed Chair Jerome Powell signalled after the Fed’s latest meeting in July.

Furthermore, Minneapolis Fed President Neel Kashkari said he hadn’t “seen anything that changes” the need to raise the Fed’s policy rate to 3.9% by year-end and to 4.4% by the end of 2023.

Chewing over those comments, investors are still unsure how set the Fed is.

Odds of a 75 bps hike in September were as high as 68% earlier in the week, but are now around 34%, where they were a week ago.

“There are too many uncertainties to know the path of oil and other CPI prices ahead, but the peak of inflation is clearly behind us,” Nikko Asset Management chief global strategist John Vail wrote in a note.

“The key question is how far and how fast it will fall. We believe inflation will be quite sticky and central banks will need to be more hawkish than consensus.” U.S. 10-year Treasury yields held firm after rising overnight and were last trading at 2.8765%. The yield plummeted on Wednesday’s CPI data but rebounded to a near three-week high on Thursday.In commodities, Brent crude oil futures fell 54 cents to $98.06 a barrel. U.S. West Texas Intermediate crude was also down, dropping 55 cents to $93.79. Brent is still on track to gain more than 4% this week, while WTI looks likely to mark a weekly climb of 5%. Bitcoin, the leading cryptocurrency, shaved some overnight gains and lost 1.10% to trade at $23,943. Spot gold was up 0.11% at $1,791 an ounce.

(Reporting by Sam Byford; Editing by Bradley Perrett)