EMERGING MARKETS-Taiwan shares jump, currency hits 15-month high on easing trade worries

By Rishav Chatterjee

May 2 (Reuters) - The Taiwan dollar and stocks in Taipei soared on Friday, leading a rally across Asian markets as signs of easing U.S.-China trade tensions sparked a wave of risk-on optimism after weeks of market turbulence.

Taiwan's currency TWD=TP strengthened 3.8% on Friday, touching a 15-month high in its biggest ever daily gain on record, LSEG data showed.

The spike was a result of retail investors repatriating overseas investments and a wave of exporters panic-selling the U.S. dollar, a local trader in Taiwan said.

Equities in Taipei .TWII surged 2.7%, hitting their highest level since the end of March and recouping all of their losses since U.S. President Donald Trump slapped levies across the globe and kicked off a trade war.

"The faster-than-expected pace of Taiwan dollar appreciation caught many market participants off guard, prompting a rush to convert USD into local currency," said Christopher Wong, currency strategist at OCBC.

"Recent gains in the Taiwan dollar have also been catalysed by prospects of dialogue between the U.S. and China."

The east-Asian trade-reliant island on Wednesday reported its economy growing at its fastest pace in a year and upgraded its annual growth estimates.

Investors also assessed indications of possible trade talks between the world's two largest economies after Beijing's commerce ministry said that Washington has repeatedly expressed its desire to negotiate on tariffs.

"Traders are identifying more upside potential in Asian economies now that the White House seems to be more open to trade negotiations," said Tim Waterer, market analyst at KCM Trade.

"Currencies such as the Taiwan dollar, baht and Singapore dollar have been among those to benefit."

All currencies in emerging Asia gained on Friday, with the Indonesian rupiah IDR= and Thai baht THB=TH appreciating more than 1% each.

The rupiah was set for its biggest one-day gain since September 2024 and touched its highest level since March 18.

The offshore yuan CNH=D3 strengthened to its strongest level since April 4. The onshore yuan CNY=CFXS was not trading on account of China markets being closed due to a public holiday.

Regional currencies were also set for weekly gains against the U.S. dollar, with the rupiah, the Singapore dollar SGD=, the Malaysian ringgit MYR=, and the Philippine peso PHP= adding between 0.6% and 1.4%.

On the data front, Bank Negara Malaysia is set to meet next week for its overnight policy rate decision. Traders are growing more confident that Malaysia's central bank (BNM) will succumb to mounting economic pressure from the global trade war and reduce interest rates.

HIGHLIGHTS:

** Indonesia's April inflation rate rises to eight-month high

** Thailand finance ministry cuts 2025 growth forecast to 2.1%