SINGAPORE - Asian stocks got a lift on Thursday from Chinese stocks as China's central bank kicked off its 500 billion yuan facility to spur capital markets, while the dollar lingered near a two-month high ahead of U.S. inflation data later in the day.

The People's Bank of China (PBOC) said it would start accepting applications from financial institutions to join a newly created funding scheme, a plan it announced on Sept. 24 as part of a series of stimulus measures that drove Chinese stocks higher.

China's blue-chip CSI300 index rose 1.7% in early trading, a day after dropping 7% as investors remained focused on the details of the stimulus measures from Chinese authorities to help revive the stuttering economy.

Hong Kong's Hang Seng rose 2.5%, after slipping 1.3% on Wednesday and is up 24% this year.

That left MSCI's broadest index of Asia-Pacific shares outside Japan 0.76% higher in early Asian hours. Japan's Nikkei rose 0.5%.

The market's attention is now on a finance ministry press conference on Saturday which will provide details of the fiscal stimulus plan.

"It’s likely that if and when we get more details on the scale of spending, other policymakers will be better able to start to roll out supportive policies relevant to their functions," said ING economists in a note on Thursday.

"While it may take more time compared to monetary policy, we continue to expect a fiscal stimulus push in the coming weeks and months."

China shares rallied to two-year highs on Tuesday after the long National Day holiday but quickly lost steam as the lack of details on China's stimulus measures dealt a blow to market enthusiasm.

Benchmark indexes in China notched their biggest daily losses on Wednesday since the COVID-19 pandemic began.

"The ultimate goal for the Chinese market isn’t to create sudden rallies. It’s all about wanting to inject confidence in the economy domestically, to relieve pressure on the real estate market. Their end objective is domestic stability," said Henry Wu, head of XTrackers Products US.

U.S. CPI LOOMS

Overnight, the S&P 500 and the Dow closed at record highs after the release of Federal Reserve meeting minutes and ahead of September inflation data.

The minutes showed a "substantial majority" of Fed officials at the September meeting supported beginning an era of easier monetary policy with an outsized half-point rate cut.

However, there appeared even broader agreement that the initial move would not commit the Fed to any particular pace of rate reductions in the future, the minutes showed.

Markets are pricing in an 82% chance of a 25 basis point cut next month, CME FedWatch tool showed, with investors scaling back expectations for aggressive rate cuts after last week's strong U.S. jobs report.

Investor focus will be on inflation data on Thursday in the form of the consumer price index (CPI) for insight into the Fed's rate path, while the corporate earnings season kicks off with bank earnings on Friday.

September's CPI is likely to show core inflation holding steady at a 3.2% year-on-year clip, according to economists polled by Reuters.

"A hotter-than-expected core inflation number would see yields extend their recent gains and for traders to scale back further expectations for a Fed rate cut in November," Tony Sycamore, market analyst at IG said.

"A scenario that is likely to raise questions around the current Goldilocks narrative and unnerve equity markets."

The shifting U.S. interest rate expectations have boosted the dollar, with the dollar index, which measures the currency against six key rivals, steady after climbing to the highest since Aug. 16 overnight.

The yen last fetched 149.13 per dollar, while the euro was at $1.09445.

In commodities, oil prices were higher as investors contended with rising tensions in the Middle East and its impact on oil supply, as well as a spike in demand as a major storm barrelled into Florida.

Brent crude futures rose 0.4% to $76.86 a barrel, while the U.S. West Texas Intermediate (WTI) futures was up 0.37% at $73.5 a barrel.

(Reporting by Ankur Banerjee in Singapore; Editing by Muralikumar Anantharaman To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets For the state of play of Asian stock markets please click on: 0#.INDEXA)