EMERGING MARKETS-Asian FX rise on trade optimism; S.Korean shares eye best month since 2001

By Rajasik Mukherjee

Oct 31 (Reuters) - Most Asian currencies edged up on Friday, led by South Korea's won, after new U.S. trade deals in the region lifted investor sentiment, while South Korean shares headed for their best month in nearly 25 years.

South Korea's won KRW=KFTC appreciated 0.6% against the dollar to 1,426.60, while the country's benchmark KOSPI stock index .KS11 floated around a record high of 4,146.72 scaled on Thursday, driven by strong corporate earnings, trade deal with the U.S., and a surge in investor interest in artificial intelligence-linked sectors.

The KOSPI has advanced 20% in October, putting it on track for its best month since January 2001.

Easing trade tensions after U.S. agreements with regional economies and renewed dialogue with China have boosted risk appetite in emerging Asia, helping currencies rebound from pressure tied to U.S. rate uncertainty and geopolitical jitters.

"From a monetary policy perspective, these trade agreements further reduce the urgency for further policy easing in Emerging Asia's more export-oriented economies, in our view, especially in Southeast Asia," Barclays said.

For the week, Malaysia's ringgit MYR=, up 0.7%, is headed for its best week since August, while the Thai baht THB=TH has risen 1.2% this week, set to log its best week since September.

On Thursday, Thailand's finance minister said that the country's economy is expected to grow at a higher pace than it was previously estimated.

For the year, the baht has gained more than 6% and is one of the best-performing currencies in the region, although that strength is seen as a threat to exports and tourism, two key drivers of Thailand's economy.

Taiwan's benchmark equity gauge .TWII rose 0.6%, set to log its tenth consecutive week of gains, riding on renewed enthusiasm surrounding AI.

Thai stocks .SETI fell 0.2% and were set to log a weekly loss.

"The market has entered a 'wait-and-see' mode ... investors are now monitoring the potential fading of front-loaded demand, which could weigh on 4Q25 economic momentum," said Piriyapon Kongvanich, Thailand equity market strategist at Bualuang Securities.

HIGHLIGHTS:

Core consumer prices in Japan's capital accelerate, keep BOJ under pressure

China factory activity stumbles as export orders dry up

Pentagon chief joins Southeast Asian meet to shore up US ties

Thailand says PM to meet China's Xi at APEC summit on Friday