EMERGING MARKETS-Asian stocks cheer US-Vietnam trade deal; currencies steady

By Roshan Thomas

July 3 (Reuters) - Most Asian stock markets rose on Thursday, buoyed by the U.S.-Vietnam trade deal seen as a positive signal for the region ahead of the July 9 tariff deadline, while currencies held steady as traders awaited key U.S. developments.

U.S. President Donald Trump said he had sealed a trade deal with Vietnam, under which it would now be hit with a 20% tariff on exports, sharply down from 46% planned earlier.

Vietnamese equities .VNI rose 0.6% to their highest level since April 2022, while the dong VND= dropped 0.3% to hit a record low of 26,229 per U.S. dollar.

Analysts at DBS noted the deal could mitigate downside risks to Vietnam's economic growth but added it "may not prevent a slowdown in the coming quarters."

The U.S.-Vietnam deal lifted sentiment across most Asian equities on hopes other countries will strike similar agreements ahead of the July 9 tariff deadline.

The MSCI EM-Asia index .MIMS00000PUS advanced 0.2% and touched a three-and-a-half-year high earlier in the day. Philippine stocks .PSI climbed 1.1% to log their highest since May 15. The country faces an 18% tariff under Trump's plan.

Shares in Taiwan .TWII and Indonesia .JKSE climbed 0.8% and 0.3%, respectively.

South Korean stocks .KS11 rose 1% after President Lee Jae Myung said he was working to secure a "mutually beneficial and sustainable" outcome from trade talks with the U.S.

"Today's broad-based rally reflects multiple catalysts converging - Vietnam's 20% tariff deal setting a precedent, India pushing hard for its own agreement and the U.S.-China trade restrictions being rolled back on ethane," said Christopher Forbes, head of Asia, CMC Markets.

The dollar index =USD edged lower as investors awaited the U.S. Labor Department's June jobs report, due later in the day, after data earlier this week showed private payrolls fell for the first time in over two years.

Trump's massive tax and spending bill, which was pending a possible final approval by the House of Representatives, was also in focus. The bill is expected to add $3.3 trillion to the national debt, slash taxes and reduce social safety net programs.

While most Asian currencies traded sideways, Taiwan's dollar TWD=TP strengthened 0.5% to touch its highest level since early April 2022.

Exporters' demand to sell the greenback and steady inflows into domestic equities this week sustained the demand for the Taiwan dollar, OCBC forex strategist Christopher Wong said.

The Philippine peso PHP= and Indonesia's rupiah IDR= were up 0.1%.

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