Updates after tariff announcement

By Johann M Cherian and Lisa Pauline Mattackal

April 2 (Reuters) - Most Latin American currencies extended losses in volatile trading, while stock markets across the region rose after U.S. President Donald Trump announced reciprocal tariffs on trading partners on Wednesday.

In a long-awaited announcement, Trump, on what he had dubbed "Liberation Day," said he would sign an executive order for reciprocal tariffs to match duties put on U.S. goods by other countries, in a move that ratchets up a trade war that he kicked off on his return to the White House.

MSCI's index tracking currencies in the region against the dollar .MILA00000CUS fell 0.2% during the announcement in volatile trading.

MSCI's index of Latin American stocks .MILA00000PUS rose 0.2%, with Colombian stocks .COLCAP leading gains among regional indexes. Most regional stock indexes had reversed early losses to trade higher prior to the announcement, tracking gains in U.S. equities.

Mexico's peso, among the most sensitive in the region to tariff policy, MXN= fell 0.2% to 20.38 to the dollar in choppy trading. Local stocks .MXX rose 0.7%.

Mexican President Claudia Sheinbaum had said the country would not respond with tit-for-tat tariffs on the United States.

"Mexico is going to be the economy with probably the most complex set of tariffs and exceptions because of the interlinkages with the U.S. auto industry and the U.S. economy," said Padhraic Garvey, ING's regional head of research, Americas.

More broadly, both MSCI's indexes of global emerging market currencies .MIEM00000CUS and stocks .MSCIEF were flat and up 0.1% respectively.

Analysts expect Trump's move to escalate a global trade war and, in the long run, damage global economic growth, while the uncertainty over the size and scope has weighed on global markets since the start of the year.

The second one-month pause to U.S. tariffs on Mexican and Canadian imports in compliance with existing free trade rules is set to expire later this week, with additional 25% levies on automobile imports scheduled to take effect on April 3.

However, Chile's peso CLP= held losses, down 0.8% against the dollar, tracking weak prices of top export copper. MET/L

Brazil's real BRL= was flat. Investors also assessed data that showed industrial production unexpectedly fell in February from the previous month.

HIGHLIGHTS

** China sees bumper demand for debut international green bond

** PIMCO steps up private lending to emerging market governments

(Reporting by Johann M Cherian in Bengaluru, editing by Ed Osmond and Alan Barona)

((johann.mcherian@thomsonreuters.com))