* Mexican peso leads Latam gains * Tax reform in Brazil eyed; narrowing in revenue expected (Adds details, updates prices) By Susan Mathew and Ambar Warrick Sept 3 (Reuters) - Most Latin American currencies rose on Friday after a sharp slowdown in U.S. jobs growth signaled the Federal Reserve may not rush to taper stimulus, benefiting high-yielding, risk-heavy assets. Mexico"s peso, which is among the highest yielding currencies in the region, led gains with a 0.4% rise. Broader emerging market currencies surged, with the dollar retreating after data showed the U.S. economy created the fewest jobs in seven months in August. South Africa"s rand, which is also among the highest-yielding emerging market currencies, rallied more than 1%. MSCI"s index of EM currencies rose 0.2%, while its stocks counterpart climbed 0.3%. The data signaled the labor market in the United States might not yet be in a place where existing stimulus measures, put in place to tide over a pandemic-induced slump, can be tapered. Stimulus measures from major central banks had flushed markets with liquidity as the pandemic squeezed economies. But with inflation rising across the globe, several emerging market banks have begun tightening policy. "We don"t think the report is weak enough for Fed officials to back away from their "this year" tapering signal, especially given the continued strength in wages, but we believe it increases the probability of a formal announcement coming at the December rather than the November meeting," said FX strategists at TD Securities. A Reuters poll showed that Brazil"s real and South Africa"s rand are seen driving volatility in a likely sell-off in EM currencies in the next three months amid tapering fears. But, Brazil"s real will continue to get some aid this year from solid trade surpluses and further interest rate hikes. On Friday, the real currency gave up early gains to trade flat as investors monitored the progress of a likely tax overhaul and a building energy crisis. The central bank said it is "closely monitoring" the rise in electricity prices brought about by a drought. The tax reform bill passed by the lower house this week could see a narrow loss of revenues, the economy ministry said. Analysts worry about the strain on already stretched fiscal spending. Most regional bourses fell as the U.S. data also raised concerns about global growth. Losses in heavy-weight Brazilian banks pushed an index of Latam stocks 0.8% lower. Meanwhile, Refinitiv data showed EM firms flocked to bond markets to cash in on low interest rates and have raised a record amount of money to fund expansion plans. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1315.29 0.26 MSCI LatAm 2444.78 -0.84 Brazil Bovespa 116078.69 -0.51 Mexico IPC 51852.13 -0.45 Chile IPSA 4432.57 -0.12 Argentina MerVal 74680.31 -0.579 Colombia COLCAP 1323.92 -0.6 Currencies Latest Daily % change Brazil real 5.1885 -0.15 Mexico peso 19.8819 0.37 Chile peso 766.79 0.11 Colombia peso 3796.53 -0.11 Peru sol 4.092 -0.05 Argentina peso 97.8600 -0.02 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Alistair Bell and Rosalba O"Brien)