REFILE-GLOBAL MARKETS-Shares steady, yen slides after US issues tariff letters

By Rocky Swift and Johann M Cherian

TOKYO, July 8 (Reuters) - Global stocks were flat to marginally higher on Tuesday, as investors took in their stride the latest twist in U.S. President Donald Trump's tariff roll-out, while the yen slid on 25% duties facing Japanese goods.

Trump sent letters to 14 countries on Monday, including top Asian trade partners such as Japan and South Korea, unveiling sharply higher tariffs on imports into the United States.

However, market reaction has broadly been guarded, compared to the sharp declines witnessed in the aftermath of "Liberation Day" three months ago, on expectations that countries would strive to seal trade deals with the United States before the new August 1 deadline.

Europe's STOXX 600 .STOXX wavered near the unchanged mark and the euro EUR= firmed 0.4% as sources said the monetary union will not be receiving a letter setting out higher tariffs and that the EU could reach a trade deal by Wednesday.

"While a comprehensive trade deal is unlikely before the deadline, there is cautious optimism that a preliminary agreement can be reached to avert the immediate imposition of higher tariffs," Daniela Hathorn, a senior market analyst at Capital.com said.

"Such an agreement would provide a foundation for continued negotiations aimed at resolving the broader trade disputes between the EU and the U.S., improving risk appetite in European stocks and the euro."

Across the Atlantic, futures tracking Wall Street's S&P 500 EScv1 steadied after a knee-jerk selloff in the previous session.

Goldman Sachs raised its return forecasts for the benchmark index, citing expectations of U.S. interest rate cuts and continued fundamental strength of major large-cap stocks as key drivers of its positive outlook.

Still, the lack of progress on the trade front has been looming over markets ever since Trump capped all of the so-called reciprocal tariffs with trading partners at 10% for three months in April to allow for negotiations.

However, only two agreements, with Britain and Vietnam, have been reached and in June, Washington and Beijing agreed on a framework covering tariff rates, restoring a fragile truce in their trade war.

Concerns are that Trump's erratic style of policymaking could put off business investment, stall global economic growth and stoke inflation pressures. This would also complicate the work of central banks such as the U.S. Federal Reserve that have currently taken a wait-and-see approach on monetary policy.

TARIFFS ON ASIA

Southeast Asia's biggest economies are among those hit with the highest of U.S. tariffs.

Japanese Prime Minister Shigeru Ishiba called the 25% hike deeply regrettable and said his nation would continue negotiations with the U.S. Thailand's finance minister Pichai Chunhavajira said his country is preparing a back-up plan to deal with the 36% tariff imposed on its exports.

Hopes of trade deals buoyed risk appetites for regional assets on Tuesday.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.6%, while Nikkei stock index .N225 reversed early declines and was last up 0.26%.

South Korean shares .KOSPI recorded their strongest daily gain in two weeks and the won KRW= firmed 0.6%.

Export-dependent Japan's yen JPY=EBS was steady after hitting a two-week low against the dollar, but continued to weaken against a host of other currencies.

Elsewhere, the Aussie dollar AUD= surged 0.8% against the greenback after the Reserve Bank of Australia left policy rates unchanged, defying expectations for a cut.

The RBA left its cash rate steady at 3.85%, a shock for markets that had confidently priced in a cut, saying the majority of the board wanted to wait for more information to confirm inflation was slowing.

In commodities, U.S. crude CLc1 dipped 0.6% to $67.5 a barrel after surging nearly 2% on Monday.

Traditional safe-haven assets such as gold prices XAU= and government bond yields in Europe DE10YT=RR and the U.S. US10YT=RR were broadly muted.