EMERGING MARKETS-Indonesia leads Asian stocks, currencies higher; Trump tariffs on watch

By Aaditya GovindRao

March 5 (Reuters) - Indonesia led gains in largely firmer Asian equities and currencies on Wednesday, while the U.S. dollar remained weak as President Donald Trump's tariffs on China, Canada and Mexico prompted retaliatory levies.

The Indonesian rupiah IDR= was up 0.6%, while equities in Jakarta .JKSE rose as much as 3%, recouping Tuesday's 2.1% declines.

Trump triggered a trade war on Tuesday as his new 25% tariffs on imports from Mexico and Canada took effect, along with a doubling of duties on Chinese goods to 20%.

Canada and China quickly acted in kind the same day, while Mexican President Claudia Sheinbaum vowed retaliation but without details, saying she would announce Mexico's response on Sunday.

The Mexican peso MXN= was trading 0.1% lower, after having risen 0.5% on Tuesday. The U.S. dollar index =USD hovered near the three-month lows it hit in the previous session. USD/

"Tit-for-tat tariffs can undermine sentiments, and lead to demand for safe haven proxy, including U.S. Treasury yields," said Christopher Wong, a currency strategist at OCBC.

Softer U.S. Treasury yields have given currencies such as the rupiah a breather, but the gains may not hold if yields resume their upward path, Wong said.

Trump, in a speech to Congress, spoke broadly about reciprocal tariffs being imposed from April 2, and mentioned India and South Korea as examples of countries with high levies.

The Indian rupee INR=IN and the South Korean won KRW=KFTC were up 0.1% and 0.2%, respectively.

Stocks in Manila .PSI climbed 0.7% after data showed inflation eased more than expected in February. Inflation data from Thailand and Taiwan is due later in the week.

The Malaysian ringgit MYR= gained 0.4% while the Philippine peso PHP= climbed 0.3%.

The Malaysian central bank is expected to hold interest rates at its policy meeting on Thursday, and all through 2025, a Reuters poll showed.

Taiwan stocks .TWII jumped 1.4%. They are, however, still down 0.6% for the week. Taiwan Semiconductor Manufacturing Co 2330.TW was up 2.5% even as Trump said he wanted to get rid of a semiconductor chips subsidy law.

Chinese stocks .SSEC and the yuan CNY=CFXS were little changed after Beijing outlined a steady economic growth target of around 5% and ramped up fiscal stimulus as the National People's Congress, China's rubber-stamp parliament, began its annual meeting.

HIGHLIGHTS:

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