EMERGING MARKETS-Asian stocks ease off recent peaks ahead of US tariff deadline

By Sameer Manekar

July 4 (Reuters) - Stocks in emerging Asian economies retreated on Friday from recent peaks as caution set in ahead of U.S. President Donald Trump's July 9 tariff deadline, while currencies crawled higher as the dollar struggled to hold onto Thursday's gains.

An MSCI gauge of equities in emerging Asia .MIMS00000PUS slid nearly 1% from a 3-1/2-year high notched in the previous session. Stocks in South Korea .KS11 and Taiwan .TWII, making up more than a third of the index, weighed the most.

A trade deal announced on Thursday between the United States and Vietnam sparked hopes among emerging economies in the region for a potential breakthrough with Washington ahead of the July 9 deadline.

But scant details on the deal, tariffs well above pre-April 2 levels, and little clarity on how trans-shipments from China would be levied mean Asian countries will have to straddle a fine line between the world's two largest economies.

"It would be remiss to ignore the critical pillar of U.S. trade deals with the rest of Asia, which is trained on undermining China's economic reach and influence," said Vishnu Varathan, head of macro research for Asia excluding Japan at Mizuho Securities.

"And so, other Asian economies will be particularly vulnerable to a two-sided geoeconomic squeeze given that their reliance on both China and the U.S. is significant."

Cautious investors will be keenly watching Trump's approach to tariffs and whether trade partners can secure best deals for their countries before the deadline.

In South Korea, the benchmark KOSPI .KS11 fell 2% from a near four-year high, marking its worst drop since April 7. Taiwan's benchmark index .TWII slipped from a near four-month high.

Stocks in the Philippines .PSI fell 0.7% from a more than six-week peak, while those in Singapore .STI eased off from a record-closing high. Thai stocks .SETI came off a three-week peak, snapping a four-session rally.

Vietnam's benchmark index .VNI slipped from its April 2022 high. The dong VND= briefly touched a fresh low of 26,230 against the U.S. dollar. It then recovered through the session to trade slightly higher.

Other currencies in emerging Asia also gained ground in afternoon trade. Malaysia's ringgit MYR= reversed course to tick higher, while Thailand's baht THB=TH hovered near nine-month highs.

Singapore's dollar SGD= snapped a three-day losing streak to appreciate marginally, and remained a few points shy of its October 2014 high.

An index tracking global emerging market currencies .MIEM00000CUS was largely flat below a record high scaled the previous day.

The U.S. dollar index =USD, which measures the greenback against a basket of major currencies, gave up some of its gains from Thursday. Stronger-than-expected U.S. jobs data has pushed out the timing for potential rate cuts by the Federal Reserve.

HIGHLIGHTS:

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