* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* MSCI ex-Japan, Nikkei jump on positive Brexit news
* British pound slips after hitting 5-month peak
* EU to determine whether to put deal before EU leaders'
summit
By Swati Pandey and Hideyuki Sano
SYDNEY/TOKYO, Oct 16 (Reuters) - Asian shares inched higher
while sterling came off five-month highs in volatile trade on
Wednesday as investors looked to whether Britain can secure a
deal to avoid a disorderly exit from the European Union.
Officials and diplomats involved in negotiations over the
acrimonious divorce between the world's fifth-largest economy
and its biggest trading bloc said that differences over the
terms of the split had narrowed significantly. The news lit a fire under European and U.S. equities, which
jumped about 1% on Tuesday. The British pound GBP=D3 rocketed
to $1.28, a level not seen since May 21.
The pound has strengthened nearly 5% over the past week as
investors rushed to reprice the prospect of a last-minute Brexit
deal before the end-October deadline.
Still, the pound lost steam in Asia, falling 0.3% to
$1.2752, as uncertainties remained on whether a deal will be
sealed at a make-or-break EU summit on Thursday and Friday and
if Britain's minority government can get it through a divided UK
parliament.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.4% while Japan's Nikkei .N225 jumped
1.5%, hitting 10-month highs.
Australian shares .AXJO added 0.9% while South Korea's
KOSPI index .KS11 climbed 0.6%, maintaining gains after South
Korea's central bank cut its policy interest rate for the second
time in three months, matching a record low to address mounting
deflationary pressures.
Stronger-than-expected earnings from major U.S. banks
JPMorgan JPM.N , Citigroup C.N and Wells Fargo WFC.N also
boosted equities even as the International Monetary Fund
downgraded its 2019 global growth forecast for a fifth time.
"Equities rallied everywhere supported by another set of
Brexit headlines and as earnings season started in the United
States," JPMorgan analysts wrote in a client note.
"Officials cautioned that talks haven't finished yet and
there could yet be problems in hitting the deadline of midnight
Tuesday," they added.
The EU's chief Brexit negotiator Michael Barnier had been
demanding a legal text of any agreement by midnight U.K. time.
However, the talks were still going on between UK Brexit
negotiator David Frost and the EU's executive European
Commission past midnight in Brussels.
The EU will determine whether a deal is fit to be put to
Thursday's leaders' summit for consideration.
"Watching the UK news channels last night, the arithmetic
for achieving said approval is challenging to say the least,"
analysts at National Australia Bank wrote in a note.
Elsewhere, news on the U.S.-China trade front has been less
encouraging.
Bloomberg reported, citing sources, that China will struggle
to buy $50 billion of U.S. farm goods annually unless it removes
retaliatory tariffs on American products, which would require
reciprocal action by U.S. President Donald Trump.
China also said Beijing resolutely opposed new measures
passed by the U.S. House of Representatives related to the Hong
Kong protests and urged lawmakers to stop interfering.
The news helped to lift the Japanese yen JPY= from a 2-1/2
month low against the greenback hit on Tuesday.
The yen stood at 108.69 per dollar, compared to Tuesday's
low of 108.90.
"There remain concerns over whether everything goes all
right until the APEC meeting in November when they are expected
to sign a deal. I got the impression that the market got a bit
too optimistic," said Naoya Oshikubo, senior economist at
Sumitomo Mitsui Trust Asset in Tokyo.
The dollar itself was under pressure against a basket of six
major currencies with its index .DXY hovering near three-week
lows at 98.338. The euro EUR=D3 was little changed at $1.1028.
In commodities, Brent crude LCOc1 added 10 cents to $58.84
a barrel, while U.S. crude CLc1 rose 10 cents to $52.91 after
falling the previous session over fears the unrelenting
U.S.-China trade war would keep squeezing the global economy.
Spot gold was barely changed at $1,481.48 an ounce. XAU=
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
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(Editing by Sam Holmes and Lincoln Feast)