TOKYO: Asian shares stepped back from two-month highs on Tuesday and commodity currencies retreated as a big fall in oil prices triggered profit-taking, though fading expectations of an imminent US rate hike lent some support.

Trade data from China was mixed, with exports beating forecast and imports below expectations doing little to dispel concerns over a slowdown in China. Yet rising hopes of more stimulus from China underpinned markets.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 1.0 percent from their two-month high touched on Monday. Still, it was still up 7.7 percent so far this month. Japan's Nikkei fell 0.9 percent.

Oil prices tumbled on Monday as traders took profits after last week's surge to an 11-week high, and on a report that OPEC continued to boost crude production despite a persistent glut. [O/R]

Brent crude futures fell 5.3 percent on Monday, their biggest loss in about six weeks. In Asian trade on Tuesday, they rose 0.8 percent to trade at $50.45 per barrel.

China's exports fell 1.1 percent from a year earlier in September in yuan-denominated terms while imports tumbled 17.7 percent.

"The data alone would not be enough to make people optimistic on China. Still, markets appear to be supported by expectations of more stimulus after action by the People's Bank of China yesterday," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

China's central bank expanded a scheme on Monday that increases banks' ability to lend, boosting hopes of more measures to support the economy - lifting mainland Chinese shares to seven-week highs.

On Tuesday, Shanghai shares retreated about 1 percent in line with other regional share markets.

Still, on the whole, investors' risk appetite has returned as they price out a chance of the US Federal Reserve raising interest rates this year.

Fed Governor Lael Brainard reinforced such expectations, saying late on Monday the Fed should hold off on any interest rate hike until it is clear that a global slowdown, difficulties in China, and other international risks will not push the U.S. recovery off course.

In a sign of easing concerns among investors, the CBOE volatility index, often seen as investors' fear gauge in Wall Street shares, fell to 16.15 percent - its lowest level in two months.

The dollar's index against a basket of six major currencies dropped to a three-week low of 94.619 on Monday, having dropped 2.2 percent from the high hit on Sept 25. It last stood at 94.905.

Commodity currencies recovered sharply, with the Australian dollar rising to a two-month high of $0.7382 on Monday, though it fell 0.8 percent on Tuesday to $0.7300.

Emerging economy currencies from the Indian rupee to the Chilean peso gained even more as speculators bought them back, hitting their highest levels in several weeks.

"Considering that emerging economies have been a source of concern for the world economy, their recovery is positive for both emerging economies as well as risk assets as a whole," Makoto Noji, senior strategist at SMBC Nikko Securities, said in a report.

"Yet, there is no structural change in China's efforts to cut excessive investments... We should be wary of the possibility that the rally in risk assets driven by easing expectations of a Fed rate hike will run out of steam," he added.