EMERGING MARKETS-Asian FX rallies as US tariffs woes ebb; Singapore stocks defy peers to hit record high

Updates for afternoon trading

By Rajasik Mukherjee and Roushni Nair

Feb 24 (Reuters) - Asian currencies surged to multi-week highs on Monday, fuelled by improved risk appetite after U.S. President Donald Trump's tariff threats were deemed largely rhetorical, while Singapore's stocks defied regional losses to hit a record peak.

The South Korean won KRW=KFTC led the rally in currencies, adding as much as 0.7% to hit its highest since December 6. The Malaysian ringgit MYR= followed with a 0.5% jump to its highest since January 31.

The Thai baht THB=TH pared gains to trade largely flat after the country's finance minister hinted at "room" for a rate cut.

The Bank of Thailand is expected to hold rates on Wednesday, mirroring its peers in the Philippines and Indonesia. South Korea, though, is anticipated to cut rates by a quarter-point on Tuesday.

The MSCI index of emerging market currencies .MIEM00000CUS rose to 0.13% to a more-than-three-month high, helped by the U.S. dollar =USD declining as much as 0.4% to its lowest since December 10.

The greenback has shed 3.4% since Trump postponed tariffs on Canada and Mexico in early February, with traders interpreting his tariff threats as primarily bluster, dampening enthusiasm for fresh dollar holdings. USD/

"I think the dollar has moderated because the Trump administration is taking a slower and more considered approach to trade restrictions," said Kyle Rodda, senior financial market analyst at Capital.com.

Nonetheless, there are still uncertainties related to Trump's delayed tariffs and, more recently, on the Russia-Ukraine peace talks, in which Trump is also involved, said Poon Panichpibool, a markets strategist at Krung Thai Bank.

The strategist also noted the tumble in U.S. stocks on Friday when a survey on services showed a shock slide in activity amid concerns about tariffs and cost pressures. .N

"The risk-off sentiment in the US market on Friday may weigh on EM Asia equities," Panichpibool said.

Indeed, regional equities were under pressure, with those in Thailand .SETI and India .NSEI retreating more than 1% each, while Indonesian .JKSE, Malaysian .KLSE and Taiwanese .TWII shares fell just under 1%.

However, shares in Singapore .STI rose 0.6% to a record high on the government's plans on Friday for a tax rebate for primary listings and a billion-dollar program to invest in stocks, as part of its efforts to invigorate the market.

These initiatives, plus inexpensive valuations and high dividend yields, led JPMorgan to upgrade Singapore equities to "overweight".

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