EMERGING MARKETS-Stocks at two-week high as Trump hints of softer China tariffs, eases Fed criticism

By Pranav Kashyap and Johann M Cherian

April 23 (Reuters) - Emerging market stocks and currencies rose on Wednesday after U.S. President Donald Trump assured markets that he had no intention of dismissing Federal Reserve Chair Jerome Powell and hinted at potential tariff reductions for China.

A broad gauge of emerging stocks .MSCIEF was trading up 1.8%, at a more than two-week high, led by stocks in Asia, including Hong Kong's Hang Seng .HSI, Taiwan's benchmark .TWII, and South Korea's Kospi .KS11.

A regional stock index for central and eastern Europe .MIME00000PUS added 1.1%.

Investors rejoiced after Trump signalled a softer stance on trade with China, indicating that U.S. tariffs would be "nowhere near" the current 145%. This fuelled optimism among investors about potentially easing tensions between the world's two largest economies.

Global market sentiment was also bolstered by Trump's assurance late on Tuesday that he would retain U.S. central bank chief Jerome Powell.

The Fed's crucial influence in global monetary policy faced scrutiny, as questions about its independence added a twist to Trump's trade war narrative.

Investors are closely monitoring trade negotiations with the U.S., especially as discussions with 34 countries are scheduled this week.

Against the backdrop of this temporary relief, a gauge of emerging market currencies .MIEM00000CUS was flat, signalling some caution in the market.

"The process is likely to be more long drawn-out," Mohit Kumar, chief financial economist at Jefferies, said in a note. "Our view remains that Trump will need to back down and an eventual deal will be reached, but in a way that both Trump and China can claim victory in front of their electorates."

The offshore yuan CNH= ticked up 0.2%, while China's mainland stock index .CSI300 closed flat.

The South African rand ZAR= was last up 0.6%, the yield on the benchmark bond ZAR2030= dipped after data showed its headline consumer inflation fell more sharply than expected in March.

South African stocks .JTOPI added 0.9%, with Capitec Bank CPIJ.J jumping 7% after reporting a 30% rise in annual profit.

Ukrainian dollar bonds XS2895056369=TE, XS2895057177=TE gained more than 1 cent. U.S., Ukrainian and European officials meet in London on Wednesday to discuss ending Russia's war in Ukraine, but chances of any breakthrough look slim after most foreign ministers pulled out despite U.S. pressure for a deal.

In central and eastern Europe, the Polish zloty EURPLN= remained stable ahead of a bond auction by the Finance Ministry, valued between 7 to 12 billion zloty.

The Czech koruna EURCZK= edged up 0.2%. A central bank policymaker signalled caution regarding further interest rate cuts, according to a report.

The International Monetary Fund's Chief Kristalina Georgieva called for stronger action in debt restructuring to tackle rising challenges for vulnerable economies.