EMERGING MARKETS-FX steady, stocks soar after US agrees tariff deals with Japan, others

By Purvi Agarwal

July 23 (Reuters) - Most emerging market currencies inched higher and stocks soared on Wednesday after the U.S. signed trade deals with some trading partners, reviving optimism that the worst of President Donald Trump's tariff threats could be avoided.

On Tuesday, the U.S. signed a deal with Japan to lower hefty tariffs on Japanese imports and secured a $550 billion package of U.S.-bound investment and loans from Tokyo.

Trump also announced a new 19% tariff rate for the Philippines, a touch below the 20% threatened earlier this month.

Japan's Nikkei .N225 closed 3.5% higher, at its highest in a year, while stocks in the Philippines .PSI were 1.7% higher, their biggest one day gain in two months.

Indonesia's main stock index .JKSE was 1.4% higher after the country ironed out details of its trade deal with the U.S., with tariffs on its exports to the U.S. settling at 19%.

Markets have shown resilience in the face of sweeping U.S. duties, in hopes of more trade deals ahead of Trump's August 1 deadline, but little progress on the front had left investors uncertain over how the tariffs would be implemented.

"(The dial back) was kind of expected, but it was more a question of what would it actually end up being .... There is still a bigger question on what the global impact of these tariffs will be once it's all agreed and settled and starts to get reflected in some of the macroeconomic data," said Jackie Bowie, managing partner and head of EMEA at Chatham Financial.

"Equity markets are just a little bit relieved."

The optimism spread to other EMs, with stocks in Poland .WIG20 and Hungary .BUX up 1.3% and 0.5% respectively.

Turkish stocks .XU100 gained 0.3%, while South African stocks .JTOPI rose 1.2% to trade at a record high.

Johannesburg-listed shares of Dutch technology investor Prosus PRXJn.J climbed 5.3%, tracking gains in China-based Tencent 0700.HK. Naspers NPNJn.J, the largest shareholder of Prosus, also jumped 5%.

MSCI's gauge tracking global EM equities .MSCIEF jumped 1.2% to its highest since January 2022. The currencies gauge .MIEM00000CUS was 0.2% higher, with most Asian currencies up against the dollar.

Turkey's lira TRYTOM=D3 was little changed. South Africa's rand ZAR= was flat in choppy trading ahead of a vote in the local parliament on the last major piece of budget legislation.

Inflation in the country rose to 3% on an annual basis in June, as expected.

Emerging European currencies were largely subdued against the euro, except for the Hungarian forint EURHUF=, which slipped 0.5%.

Investors were monitoring peace talks between Russia and Ukraine in Turkey, scheduled for Wednesday.

HIGHLIGHTS:

** India, UK to sign free trade deal during Modi's visit, cut tariffs on whisky, garments

** Sri Lanka central bank holds rates on tariff uncertainty

** Nigeria's Senate approves President Tinubu's $21 billion external borrowing plan

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