EMERGING MARKETS-Emerging Asia sees mixed currency trends as US-China trade war escalates

Updates as of 0644 GMT

By Rishav Chatterjee

Feb 4 (Reuters) - Currencies in developing nations traded mixed, while stocks mostly climbed in Asia on Tuesday, as investors scrambled to keep up with a tit-for-tat escalation of a global trade war between the world's two largest economies - China and the U.S.

The Malaysian ringgit MYR= and Philippine peso PHP= added 0.3% each, while the Taiwan dollar TWD=TP and Thai baht THB=TH shed 0.2% and 0.4%, respectively.

U.S. President Donald Trump paused the imposition of 25% tariffs against Mexico and Canada after leaders of the two countries said they would boost border enforcement efforts.

Meanwhile, the President's press secretary confirmed that Trump would speak with his Chinese counterpart Xi Jinping soon.

China responded to the new U.S. tariffs with a probe into Alphabet-owned Google GOOGL.O and put retaliatory levies on a slew of U.S. products just after the U.S. tariffs kicked in.

"While there has been disappointment that a U.S.-China trade deal did not come through before the tariff deadline, markets are clearly over-reacting here," said Charu Chanana, chief investment strategist at Saxo, Singapore.

"This underscores how edgy the markets are amid this uncertainty of tariffs, which creates immense unpredictability for corporates and investors alike."

The South Korean won KRW=KFTC dropped 0.1%, while the Indonesian rupiah IDR= traded 0.4% in the green.

"Any sign that both Xi and Trump have a 'good talk' or both countries express commitment to work on a deal should qualify as a temporary truce and be supportive of sentiments," said Christopher Wong, forex strategist, OCBC.

Indonesia, Southeast Asia's largest economy, reported its annual inflation rate slowing to its lowest in 24 years in January on Monday, reflecting a discount in electricity tariffs given by the government as part of a stimulus package.

Citi analysts expect electricity tariffs to normalise in March and kept their fiscal 2025 inflation narrative unchanged, while continuing to factor in a 25-basis-points rate cut in March by Bank Indonesia.

Jakarta stocks .JKSE gained 0.8%.

Share markets in emerging Asia were mostly upbeat on the day, with Taipei .TWII and Kuala Lumpur .KLSE stocks jumping 0.4% and 0.5%, respectively.

Taiwan Semiconductor Manufacturing Co 2330.TW added 2.3%, recouping Monday's 6% loss.

The Philippine benchmark index .PSI, which had slipped from its October 2022 highs last week on concerns over global economic uncertainty and economic growth worries, climbed 3.4% on the day and was set for its second straight session of gains.

India .NSEI and Thailand .SETI equities added 0.8% and 0.2%, respectively.

HIGHLIGHTS:

Malaysia PM says will build trade relations, not wait for U.S. tariffs

Indonesia government gets approval for Temasek-like investment agency