EMERGING MARKETS-Asian markets rally as investors shrug off Trump's tariff threats

By Roushni Nair

Aug 7 (Reuters) - Asian currencies firmed and most stock markets rose on Thursday as investors appeared to dismiss U.S. President Donald Trump's tariff threats, while expectations of a Federal Reserve interest rate cut boosted risk appetite and weakened the dollar.

The Taiwan dollar TWD=TP led the gains, rising 0.6% to a one-week high. The South Korean won KRW=KFTC advanced 0.5%, while the Indonesian rupiah IDR= and Thai baht THB=TH both climbed 0.3%.

Markets largely shook off Trump's latest tariff moves, including an additional 25% tariff on India over Russian oil purchases and a threatened 100% duty on semiconductor chips.

Most Asian tech heavyweights are expected to be exempt from chip levies if they have committed to U.S. manufacturing or are establishing operations there.

However, some markets showed vulnerability to tariff threats. Philippine shares .PSI fell 1% after the president of the domestic semiconductor industry warned that 100% tariffs could be "devastating," given semiconductors comprise 70% of the country's total electronics exports.

The index recouped the losses to trade flat by 0740 GMT, while the peso PHP= gained 0.3%.

Threatened tariffs on pharmaceutical and technology sectors could provide the greenback support this month, even as further weakness in the dollar is anticipated following the weak payrolls data, warned Jeff Ng, head of Asia macro strategy at Sumitomo Mitsui Banking Corp.

Regional stock markets advanced elsewhere, with Singapore .STI and South Korea .KS11 both rising more than 0.8%.

Taiwan stocks .TWII surged 2.6% to a more than one-year high, while Thailand's SET index .SETI rose over 1% in its fourth consecutive session of gains and hit a five-month high.

Indian shares .NSEI fell 0.6%, while the rupee INR=IN was flat.

Political uncertainty also weighed on dollar sentiment. Trump said on Tuesday he will decide on a Fed board nominee this week while narrowing replacements for Fed Chair Jerome Powell to four candidates.

Market participants are now waiting to see if China can reach a durable tariff agreement with the U.S. administration ahead of an August 12 deadline.

Without a deal, global supply chains could face renewed turmoil from U.S. duties snapping back to triple-digit levels, amounting to a bilateral trade embargo.

Trump said on Wednesday he might impose additional tariffs on China similar to the 25% duties on India, depending on future developments.

HIGHLIGHTS:

** India-U.S. spat over trade and oil threatens wider fallout

** China July coal imports fall 23%