Updates as of 0705 GMT

By Rishav Chatterjee

April 25 (Reuters) - Emerging Asia shares rallied on Friday, led by indexes in Manila and Taipei, on a potential de-escalation in trade tensions between the world's two largest economies, while currencies in the region struggled for direction.

Equities in Taiwan .TWII jumped more than 2%, tracking a tech-led rally on Wall Street after strong earnings reports from Google-parent Alphabet GOOGL.O and AI major ServiceNow NOW.N.

Taiwan hosts some of the world's largest chip manufacturers, such as TSMC 2330.TW, which gained 2.8%, boosting the broader index.

Stocks in Kuala Lumpur .KLSE, Bangkok .SETI and South Korea .KS11 rose 0.1%, 0.9% and 1%, respectively.

The Philippines share market .PSI touched its highest since March 21, reflecting the limited impact of U.S. President Donald Trump's tariff policies. The benchmark was also set for its best week since early March.

Analysts at JPMorgan Chase upgraded Manila stocks to an "overweight" rating earlier this week and called them a relative winner through the global upheaval triggered by Trump's tariffs.

"We think the market is pricing in the Philippines’ resilient narrative amid limited impact of Trump 2.0 policies on economy and earnings," said Estella Dhel Villamiel, head of institutional equity research at First Metro Securities.

Currencies in Asian nations were mixed, while the dollar gained , with investors taking a cautious stance amid the Trump administration's mixed signals on trade negotiations and comments on the Federal Reserve Chair.

During the week, the U.S. shifted its tone on tariff deal with China by saying the situation was unsustainable and that Beijing was considering exempting some U.S. imports from its 125% tariffs.

"A case of de-escalation narrative persisting for awhile more should not be ruled out and this can aid U.S. dollar short covering, following the over 10% decline (at one point) since January peak," said Christopher Wong, currency strategist at OCBC.

Wong, however, added that a broad bounce back in the U.S. dollar may also see some Asian currencies, excluding Japan, come under pressure in the interim despite a conciliatory tone towards the trade deal.

The Indonesian rupiah IDR= jumped as much as 0.3% to 16,815 per U.S. dollar and was set for its strongest session since April 10. Jakarta equities .JKSE rallied 0.8%.

Bank Indonesia, earlier in the week, held interest rates steady in a bid to limit the depreciation of the currency.

Fakhrul Fulvian, an analyst with Trimegah Securities, attributed the rupiah's gain to the "loosening of trade war tensions".

Among other currencies, the Singapore dollar SGD= and South Korean won KRW=KFTC dropped around 0.3% each while the Philippine peso PHP= added 0.2%.

HIGHLIGHTS:

** Indonesia wants 'fair and square' trade in US tariff talks

** Thai PM hospitalised with fever following Cambodia trip

(Reporting by Rishav Chatterjee in Bengaluru; Editing by Jacqueline Wong and Eileen Soreng)

((Rishav.Chatterjee@thomsonreuters.com;))