EMERGING MARKETS-EM FX steady after yen intervention concerns, stocks hit record on Asia-led rally

By Purvi Agarwal

Jan 27 (Reuters) - Most emerging market currencies steadied on Tuesday, after robust gains in the previous session where yen-intervention jitters weighed on the dollar, while heavyweight Asian equities led a rally in stock prices.

MSCI's measure of global EM stocks .MSCIEF gained 1.2% to hit a record high in its fourth consecutive session of gains.

Asian stocks broadly recorded robust gains, with the index in South Korea .KS11 up 2.7%, touching a record high. Thailand .SETI and Hong Kong .HSI rose 2.1% and 1.4% respectively.

The gains were largely driven by appetite for AI stocks and took the sting out of U.S. President Donald Trump's threat to impose higher 25% tariffs on South Korean goods, accusing the country's legislature of "not living up" to its trade deal.

South Korea scrambled to assure the U.S. it remained committed to implementing a trade deal, and the ruling party said it was ready to work to speed up the passage of bills that allowed enactment of the deal.

"The impact of the new tariff announcement is limited at this stage as it remains unclear when the higher tariff will take effect, and how long it will stay in place," said strategists at UBS Global Wealth Management.

"Given South Korea's ruling party holds a majority in both the standing committee and the parliament, we see little issue in the passage of the special bill."

Optimism showed in other emerging markets, with bourses in Romania .BETI and Hungary .BUX both up 0.9%, while Poland's main index .WIG20 was 0.1% higher.

South African stocks .JTOPI were off 0.1%, after adding about 4% in the last six sessions.

Currencies were mixed against the dollar, with the MSCI gauge of global EM currencies .MIEM00000CUS little changed, after a three-session rally.

Market participants are still watching for any signs of intervention in the Japanese yen, that sent the currency soaring and weighed on the dollar on Monday.

South Africa's rand ZAR= fell 0.2%, while Turkey's lira TRYTOM=D3 slipped 0.1%.

In Europe, Hungary's forint EURHUF= weakened 0.4% against the euro ahead of a local monetary policy decision, where the central bank is expected to hold interest rates steady.

Meanwhile, a Financial Times report said that the Trump administration has signalled to Ukraine that U.S. security guarantees depend on Kyiv agreeing to a peace deal, likely requiring it to cede the Donbas region to Russia.

It comes a day after Ukraine said a U.S. document with security guarantees for Kyiv was ready. Russia, Ukraine and the U.S. are expected to meet for talks in Abu Dhabi on Sunday.

Ukraine bonds steadied on Tuesday after gaining over 1 cent on the dollar in the previous session, pushing many bonds to their highest price levels since their restructuring last year.

Meanwhile, analysis released by ONE Data showed China's role as a leading financier to developing nations has shifted over the past decade, with new loans to poorer countries falling sharply while debt repayments continue to rise.

HIGHLIGHTS:

India, EU slash tariffs on autos, spirits, textiles in landmark trade deal

Chinese industrial profit rises in 2025, first time in four years

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