Oil prices rose in Asian trade on Thursday tracking a weak dollar and signs of improving U.S. fuel demand, although softer-than-expected Chinese inflation data limited major gains.

The dollar sank for a second day against the yen on Thursday, feeling the pressure from lower U.S. Treasury yields after slowing inflation gave traders more confidence that the Federal Reserve is through with rate hikes.

Bank of Japan (BOJ) Governor Kazuo Ueda said on Tuesday the central bank will end its yield curve control policy and then start shrinking its balance sheet, once prospects heighten for inflation to sustainably hit its 2% target.

Most Asian stocks sank on Wednesday as markets hunkered down before key U.S. consumer inflation data due later in the day, with Chinese bourses down for a second straight session after disappointing trade readings.

Malaysia's economic growth probably slowed in the first quarter, hit by tepid consumption and declining exports, a Reuters poll of economists showed.

The European Central Bank will keep raising borrowing costs until it sees core inflation decline sustainably, ECB board member Isabel Schnabel said on Tuesday, adding market expectations for rate cuts were misplaced.