Asian stocks, currencies climb as ceasefire optimism spurs risk-on sentiment

• MSCI Asian EM equities index rises over 2%
• South Korean shares up 2.8%
• Bank of Thailand's policy decision due on Wednesday

June 24 (Reuters) - Asian emerging market equities and currencies strengthened on Tuesday, as investors returned to risk assets after U.S. President Donald Trump's announcement of a ceasefire between Israel and Iran triggered a relief rally.

The MSCI's gauge of Asian emerging market equities .MIMS00000PUS climbed 2.2%, rebounding from a 0.8% decline on Monday.

South Korean shares .KS11 rose 2.8% while stocks in Indonesian markets gained 1.6%. Equities in Taiwan .TWII and Philippines .PSI were up 1.9% and 1.5%, respectively.

Late on Monday, Trump announced a full ceasefire between Israel and Iran, potentially bringing an end to the 12-day conflict that forced millions to flee Tehran and stoked fears of a wider regional escalation.

However, Israel did not confirm the ceasefire, and its military said it detected missiles launched from Iran in the early hours of Tuesday. The Israeli shekel ILS= rose 0.8%.

An Iranian official earlier confirmed that Tehran had agreed to a ceasefire, but the country's foreign minister said there would be no cessation of hostilities unless Israel stopped its attacks.

Markets jumped on any signs of de-escalation as a rallying catalyst, even in the absence of confirmed ceasefire details, analysts at DBS said in a note.

The dollar, which was buoyed by safe-haven demand last week, fell broadly after the ceasefire news, while oil prices tumbled to their lowest level in more than a week. O/R

Oil prices influence regional currencies, since most emerging Asian economies are net oil importers and a rise in prices typically widen their current account deficits.

The MSCI index of emerging market currencies .MIEM00000CUS edged up 0.5%.

The Philippine peso PHP= was up 1.3%, rebounding from a 0.8% drop on Monday. The South Korean won KRW=KFTC gained 1.3% while the Malaysian ringgit MYR= strengthened nearly 1%.

The Thai baht THB=TH was largely flat ahead of the Bank of Thailand's policy meeting on Wednesday, where the central bank is expected to stand pat on its rates.

Bangkok stocks .SETI jumped 2.6% on Tuesday, rebounding after hitting a five-year low in the previous session.

Thailand's military shut most border crossings with Cambodia to tourists and traders, a day after the government pledged to finalise a cabinet reshuffle and adopt a "new way of working", as Prime Minister Paetongtarn Shinawatra comes under growing pressure over her handling of a border dispute with Cambodia.

Thailand's political landscape has been mired in uncertainty since the Bhumjaithai Party exited the ruling coalition last week, prompting other allies to reconsider their support.

HIGHLIGHTS:

** Malaysia's May CPI rises 1.2% y/y, less than forecast

** Indonesia palm oil stocks rise by 50% in April after fall in exports