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EMERGING MARKETS-Asia's currencies find respite in retreating U.S. yields

    * India shares extend losses as COVID-19 cases spike
    * Philippine March inflation eases for the first time in
6-months 
    * Fed minutes for March meeting expected on Wednesday
    * RBI meeting on Wednesday

    By Nikhil Nainan
    April 6 (Reuters) - Asia's emerging currencies found some
respite on Tuesday as the dollar dipped to a near two-week low
and U.S. bond yields retreated, with Malaysia's ringgit and
South Korea's won leading gains in the region. 
    Stock markets were more mixed, with shares in Taiwan
rising 1% following a market holiday on Monday, while in
Malaysia and Singapore shares were down less than
half a percent.
    The dollar's losses come even as data showed a gauge of U.S.
services activity hit a record high in March, and Friday's
bumper jobs report, opening a cautious door to questions as to
how much further the greenback and U.S. yields can go.

    "While the market was caught wrong-footed at the start of
the year, it is not as convincing to argue that dollar rates are
now overly low," Eugene Leow, a DBS rates strategist said in a
note. 
    "We are wary of frontloading Fed hikes; the Fed is unlikely
to hike before 2023, in our view," Leow added.
    The dollar has risen sharply so far this year, enjoying its
best quarter in nearly three years, as the U.S. economy
outperforms the world thanks to ultra-loose monetary policy,
large fiscal packages and an aggressive vaccination campaign. 
    All that has helped raise the yield on 10-year Treasuries
 to pre-pandemic levels, sapping appetite for Asia's
risk-sensitive assets and raising questions whether the Federal
Reserve can stick to its pledge to keep interest rates steady
through 2023. 
   On Wednesday, the Fed will release minutes of its March
meeting, though will not include recent strong data points.
 
    Indian shares opened lower on Tuesday, extending
Monday's sharp decline after the country breached the grim
milestone of 100,000 daily infections.
    Many Indian state leaders have asked the prime minister to
open up vaccinations to most of the country's hundreds of
millions of adults given the spike in infections and as fresh
restrictions go into force in parts. 
    The Reserve Bank of India will end its policy meeting on
Wednesday, where the focus will be on commentary as rates are
expected to remain unchanged.
    "We think the RBI will be open-ended on its accommodative
stance, with comments highlighting that it will be maintained
until recovery can be self-sustaining," TD Securities said in a
client note. 
    "Anything more hawkish could hurt the bond market at a
fragile time."
    In the Philippines, dealing with its own COVID-19 spike,
shares were up half a percent and the peso flat. 
    Inflation eased for the first time in six months in March,
though it remained above the central bank's target range for the
year. Bangko Sentral ng Pilipinas Governor said current monetary
policy settings remained appropriate.
    Thai markets were closed for a public holiday. 
    
    HIGHLIGHTS:
    ** Indonesian 10-year benchmark yields rose 4.3 basis points
to 6.661%
    ** In the Philippines, Universal Robina Corp and
Jollibee Foods Corp led gains   
    
  Asia stock indexes and currencies at   0406 GMT
 COUNTRY       FX RIC      FX       FX     INDEX    STOCKS   STOCKS
                           DAILY %  YTD %           DAILY %  YTD %
 Japan                     -0.15    -6.43           -1.11    8.42
 China                     +0.19    -0.41           -0.32    0.01
 India                     0.00     -0.31           -0.30    4.37
 Indonesia                 +0.03    -3.21           0.37     0.22
 Malaysia                  +0.24    -2.66           -0.34    -2.97
 Philippines               +0.02    -1.13           0.49     -8.58
 S.Korea                   +0.29    -3.40           0.02     8.63
 Singapore                 +0.05    -1.48           -0.37    12.45
 Taiwan                    +0.15    -0.02           0.95     13.55
 Thailand                  -        -4.56           -        8.99
 

 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Kim
Coghill)
  
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