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Markets around the world plunged earlier in the week as a slump in Shanghai shares fuelled worries over China's economic health, but some calm returned after Beijing rolled out strong policy easing steps late on Tuesday.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.8%, pulling away from a three-year low hit earlier in the week.
Chinese shares, the epicentre of recent financial market tremors, were solidly higher for most of the day, though they were off session highs in afternoon trade. The CSI300 index added 0.7% and the Shanghai Composite Index was slightly higher, after the indexes had plunged more than 20% over the past week.
Tokyo's Nikkei ended up 1.1%, adding to the previous day's 3.2-percent gain, after US stocks racked up their biggest one-day gain in four years.
Ironically, US stocks rallied on Wednesday on expectations that the Fed would hold off from hiking interest rates next month due to mounting global uncertainties, including China - the very factors that prompted heavy selling in the previous sessions.
Chinese shares had ended lower in the previous session as a double-barrelled blast of central bank stimulus failed to convince investors of Beijing's ability to jolt the world's second-biggest economy out of its slowdown.
In currencies, the dollar dipped briefly overnight after Dudley's comments on the chances of a September rate hike.
However, he warned about overreacting to "short-term" market moves, and left the door ajar to raising rates when the US central bank holds a policy meeting on September 16-17.
The greenback subsequently rallied as ebbing risk aversion reduced demand for the yen and euro, which had been bought as safe haven plays during the recent equity selling.
The dollar got an additional boost from upbeat US durable orders data, which backed the view that the Fed would remain on track to eventually raise interest rates as the US economy continues to recover.
Against the Japanese currency, the greenback fetched 119.92 yen, steady from US levels and recovering from a seven-month low of 116.15 plumbed on Monday
The euro was up about 0.3% at $1.1349 after losing 1.7% in the previous session. It scaled a seven-month peak of $1.1715 on Monday.
The common currency was also hurt by comments from a senior European Central Bank official. Peter Praet said the risk of the ECB missing its inflation target has increased due to commodity price falls and weakness in some overseas economies.
Crude oil rebounded amid a general thaw in global risk aversion. US crude futures bounced 2.2% to $39.45 a barrel. The contracts had slumped to a 6-1/2-year low on Monday, dogged by supply glut woes and worries of a hard landing by China's economy. Brent added 2.3% to $44.11.
Copper was up about 0.9% at $4,979.50 tonne, moving further away from a six-year low of $4,855 hit on Monday.
Gold took back some lost ground after suffering its biggest fall in five weeks overnight as the dollar rebounded and US stocks rallied. Spot gold rose about 0.2% to $1,127 an ounce.
