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Asian stocks pulled away from 20-month lows on Wednesday, thanks to a rebound on Wall Street, although investors remained cautious after an October month that saw sharp downturns across global equity markets.

A confluence of factors from Sino-U.S. trade tensions to worries about U.S. corporate earnings to the end of easy money in development economies have spurred volatility in financial markets in the past few weeks.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.75 per cent, but it was still on track to fall roughly 11 per cent this month.

The index had dropped to its lowest level since February 2017 on Monday as worries over corporate profits weighed heavily on U.S. equities.

Wall Street’s three stock indexes jumped more than 1 per cent on Tuesday, helped by strong gains for chip and transport stocks as investors took advantage of cheaper prices following the steep recent pullback for equities.

Hong Kong’s Hang Seng rose 1 per cent and the Shanghai Composite Index climbed 0.75 per cent, with the gains coming despite weak factory activity data for this month.

Australian stocks were up 0.3 per cent, South Korea’s KOSPI rose 0.1 per cent and Japan’s Nikkei advanced 1.3 per cent.

“The recent slide in equities had gone to such an extent that it was bound to invite buyers, such as in the Japanese stock market,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

The MSCI AC World index, which includes a few large emerging markets in addition to developed markets, was down 8.5 per cent this month and has lost about $4-trillion in value. The narrower MSCI World Index was down 8.7 per cent and has wiped out $4.5-trillion in October.

Ichikawa at Sumitomo Mitsui Asset Management said the outlook for markets was still cloudy, adding that the U.S.-China trade row will “likely to remain a factor of concern beyond the U.S. midterm elections.”

U.S. President Donald Trump said during an interview with Fox News late on Monday that he thought there could be an agreement with China on trade. But he also said he had billions of dollars worth of new tariffs ready to be imposed if a deal was not possible.

In currencies, the dollar index against a basket of six major currencies extended overnight gains and rose to a 16-month peak of 97.054 after data on Tuesday showed U.S. consumer confidence rose to an 18-year high in October, suggesting strong economic growth could persist in the near term.

The dollar rose to a three-week high of 113.330 yen.

Immediate focus for the yen was on the Bank of Japan’s policy decision due later in the day.

Later on Wednesday, the BOJ is set to keep monetary policy steady and maintain its optimistic view on the economic outlook, even as global trade frictions, growth worries and volatile markets put it further away from achieving its elusive inflation target.

The euro was little changed at $1.1345 after losing 0.25 per cent the previous day. A dip below $1.1336 would take the single currency to its lowest since mid-August.

China’s yuan strengthened a touch to 6.9652 dollar in onshore trade but remained in proximity of a decade low of 6.9724 brushed on Tuesday.

The yuan has been pressured by worries about slowing Chinese economic growth and a potential sharp escalation in the U.S.-China trade war.

The Australian dollar was down 0.3 per cent at $0.7083, weighed by soft domestic inflation data. The lacklustre October China factory growth data was also a drag on the Aussie.

Oil prices recovered slightly after dropping to multi-month lows the previous day on signs of rising supply and concern that global economic growth and demand for fuel will fall victim to the U.S.-China trade war.

U.S. crude futures was up 0.4 per cent at $66.44 per barrel after dropping to $65.33 on Tuesday, their lowest since mid-August.

Brent crude gained 0.53 per cent to $76.31 per barrel after a decline of 1.8 per cent on Tuesday.