EMERGING MARKETS-Asian stocks fall on US tariff uncertainty; currencies set for monthly gains

By Himanshi Akhand

May 30 (Reuters) - Emerging Asian stock markets fell on Friday after a federal court temporarily reinstated tariffs imposed by U.S. President Donald Trump, while currencies showed a varied performance against a muted dollar but remained on track for monthly gains.

MSCI's gauge of Asian emerging market equities .MIMS00000PUS fell 0.6%.

Stocks in Thailand .SETI dropped as much as 1.1% to a more than one-month low and those in the Philippines .PSI fell 0.7%. Seoul shares .KS11 traded nearly 1% lower.

A federal appeals court temporarily reinstated the most sweeping of Trump's tariffs, a day after a U.S. trade court ruled that he had exceeded his authority in imposing the duties and ordered an immediate block on them.

The world is still faced with the tariff reality and markets are taking a more conservative bet that much of Trump's tariffs would stay, according to Fiona Lim, senior FX strategist at Maybank.

As a result, the U.S. dollar surrendered earlier gains and remained subdued on Friday, poised for its fifth consecutive monthly decline. FRX/

Regional currencies moved in different directions. The Thai baht THB=TH and the South Korean won KRW=KFTC were down 0.3% and 0.4%, respectively. The Malaysian ringgit MYR= and the Philippine peso PHP= each edged 0.1% higher.

Trump's tariff reversals and rising concerns over U.S. fiscal health have undermined confidence in American assets, prompting investors to shy away from the dollar and favour Asian currencies this month.

The MSCI's emerging market currencies index .MIEM00000CUS has gained more than 2% in May, its best monthly performance since November 2023.

The baht has gained 2.3% in May, its best monthly gain since September 2024, and the Singapore dollar SGD= is poised for a fifth consecutive monthly gain.

The won has also jumped nearly 4% this month, with Seoul officials confirming currency policy was on the table during recent talks with U.S. counterparts, fuelling speculation of joint FX moves.

While the Taiwan dollar TWD=TP, which was not trading on Friday on account of a public holiday, has logged a 6.5% monthly gain - its best on record.

The bumper performance follows a historic surge in the currency in early May on speculation that Washington has asked Taipei to allow it to strengthen as part of tariff talks.

Taiwan's central bank has denied that Washington made any such request.

All eyes are now on developments regarding the highly anticipated trade deals as the July 9 tariff deadline imposed by Trump approaches.

"Any trade deal or signs of tensions easing could continue to spur unwinding of short USD positions and keep the USDAxJ mostly supported on dips in the near term," Maybank's Lim said.

Markets in Indonesia were closed for a public holiday.

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