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By Rajasik Mukherjee and Roushni Nair

Feb 21 (Reuters) - Asian currencies struggled for a clear direction on Friday, with Malaysia's ringgit rising the most in the region, while stocks rose as investors digested U.S. President Donald Trump's tariff threats as mere rhetoric.

Some traders view the impact of Trump's tariffs on global economic growth as temporary, with new tariffs on Canadian and Mexican imports delayed, while a 10% tariff on Chinese imports and levies on global steel and aluminium have been implemented.

The ringgit MYR= rose 0.3% to a two-week high against the U.S. dollar, while the Indonesian rupiah IDR=, which has been the region's worst performing currency so far in 2025, gained as much as 0.3%.

The MSCI gauge of emerging market currencies .MIEM00000CUS climbed 0.2%, hitting its highest in more than three months.

The U.S. dollar index =USD, which measures the currency against six major counterparts, touched its lowest for 2025 at 106.29 on Thursday and was last at 106.54.

The dollar was set for a third weekly drop in a row as bulls who had built up big long positions in anticipation of a trade war have backed off while Trump equivocates about tariffs.

Markets appear to have become overall immune to tariff headlines, waiting for a firmer plan, which is now expected to come closer to April, analysts at Barclays said in a note.

"Risk sentiment among the EM investors seemed to have turned better this week, but we wait for more clarity for a more fundamental recovery," Barclays said.

The Thai baht THB=TH fell as much as 0.5% in late trade after rising 0.1% earlier in the day.

The weakness is largely due to potential selling of Thai bonds and stocks by foreign investors, said Poon Panichpibool, a markets strategist at Krung Thai Bank.

The baht, a standout performer so far in 2025, has risen nearly 1% over the past two weeks, fuelled largely by the recent gold price rally. As a significant gold exporter, Thailand is reaping the benefits of higher gold prices.

Meanwhile, Singapore's Straits Times Index .STI has risen 1.3% this week and is poised for its fourth consecutive weekly gains, driven by strong earnings from United Overseas Bank UOBH.SI and Singapore Airlines SIAL.SI, and positive sentiment surrounding the 2025 budget.

The index, however, traded flat on Friday, a move mirrored by the local currency SGD=.

Elsewhere in the region, Philippine stocks .PSI gained as much as 0.7%, while stocks in Jakarta .JKSE inched 0.1% lower.

Taiwanese stocks .TWII closed 1% higher, rising more than 2% for the week in their best gain of the year so far.

HIGHLIGHTS:

** BOJ chief signals readiness to increase bond buying if yield jumps

** Malaysia's January CPI rises 1.7% y/y, in line with forecast

(Reporting by Rajasik Mukherjee in Bengaluru; Editing by Michael Perry and Subhranshu Sahu)

((Rajasik.Mukherjee@thomsonreuters.com))