EMERGING MARKETS-Asia shares climb as Trump dials back Fed rhetoric

By Rishav Chatterjee

April 23 (Reuters) - Emerging Asian stocks rose on Wednesday and currencies eased against a firmer dollar, as investor sentiment improved after reassuring comments from U.S. President Donald Trump on the Federal Reserve and on China tariffs.

Trump's said late Tuesday he had no plans to fire the U.S. central bank chief, Jerome Powell, which calmed investors who had been rushing out of American assets concerned over the Fed's independence after days of increasing criticism from the president.

Trump also said he "won't play hardball" with China on trade, and that U.S. tariffs on China will be "nowhere near" the current 145%, which gave investors some hope of de-escalation in tensions between the top two economies of the world.

Philip Wee, senior FX strategist at DBS, said the market focus has shifted from Trump's criticism of Powell towards renewed hopes of de-escalating US-China trade tensions. He expressed concerns, however, over how long a rally in emerging equities could continue.

"The tug-of-war between Trump’s unpredictable policymaking and the reality of slowing growth amid fragile risk appetite may limit clear directional conviction in the near term," added Wee.

A broad gauge of emerging stocks .MSCIEF was trading 1.7% higher for the day and has eked out a small gain for the year.

Stocks in Taipei .TWII rose 4.1% to lead regional markets, buoyed by Taiwan Semiconductor Manufacturing Co's 2330.TW 6% jump, taking after a tech-fuelled rally on Wall Street.

Taiwan's equity market has been disproportionately hit by tariff tensions, falling 15% this year and making it one of the worst performing indexes globally.

"With optimism that the worst of the trade tensions may have passed, markets across the region—previously hit hard such as Taiwan—are now posting stronger gains," said Yeap Jun Rong, markets strategist at IG.

Elsewhere, the benchmark index in Singapore .STI extended its rally into a seventh straight-session. Equities in Indonesia .JKSE and Malaysia .KLSE added 1.3% and 0.5%, respectively.

Currencies in developing nations retreated against a rising U.S. dollar while the Indonesian rupiah IDR= slipped to its lowest since April 9 ahead of a monetary policy decision by the local central bank.

Bank Indonesia (BI) is widely expected to hold its benchmark interest rate later in the day to bring stability to a currency that has been marred by uncertainty over U.S. tariffs and has lost about 4.7% since the beginning of the year.

Elsewhere in Southeast Asia, the Malaysian ringgit MYR=, Philippine peso PHP= and Singapore dollar SGD= dropped between 0.4% and 0.1%.

The U.S. dollar =USD, which has struggled to maintain its safe-haven appeal amid global trade tensions and posted its weakest start in at least two decades, was steady at 99.25.

HIGHLIGHTS:

Japan's factory activity shrinks on tariff woes, services perk up

Vietnam seeks more free trade deals to drive growth as Trump tariff looms