EMERGING MARKETS-Asian FX sold off as Fed turns hawkish; Bank Indonesia decision on tap

    * Rupiah set for worst day since Feb. 26
    * Won hits lowest since May 20
    * Indonesia, Taiwan rate decisions due
    * Graphic: World FX rates
    * Asian stock markets:

    By Shashwat Awasthi
    June 17 (Reuters) - South Korea's won led declines among
emerging Asian currencies on Thursday as the dollar rose after
the U.S. Federal Reserve signalled it would raise interest rates
earlier than expected, while Indonesian investors awaited a
central bank meeting.
    The won slumped 1.1% and was on track for its
worst day since early May as the sudden shift in the Fed's
outlook sent the greenback to two-month highs. Seoul's KOSPI
index shed half a percent.
    The rupiah suffered its biggest one-day drop since
late February. Jakarta's main stock index was flat,
however, as Bank Indonesia was widely expected to leave record
low interest rates unchanged as the economy struggles for
    The Fed's indications on policy tightening and tapering bond
buying bruised most emerging market assets as dealers feared
this could give regional central banks impetus to follow suit,
which could cycle cash out of those markets.
    "The stage is set for what I feel is a period of somewhat
higher volatility as the narrative changes and traders adjust to
a future reduction in liquidity conditions," said Chris Weston,
head of research at broker Pepperstone.
    A majority of Bank of Korea's board members have already
signalled support for pulling back pandemic-driven stimulus,
minutes of its policy meeting showed this week.
    The firmer dollar sent the Thai baht and the
Philippine peso 0.5% and 0.4% lower, respectively.
    Equity markets also saw traders take money off the table.
Philippine shares, which have soared more than 11% in the
last three weeks, slid 1.3% and were set for their biggest
one-day drop in more than a month.
    "While markets start adjusting to expectations for a
reduction in policy support ahead, risk-off sentiments may
linger at a time where markets have had a strong run-up since
the start of the year," said Yeap Jun Rong, a market strategist
at IG.
    Thailand's stock index outperformed its peers, as
the government's plan to reopen the nation to visitors within
120 days and kick-start the tourism-reliant economy helped it
add 0.2% on the day.
    ** Indonesian 3-year benchmark yields are up 6 basis points
at 4.707%.
    ** In the Philippines, top index losers are Bloombery
Resorts down 2.4%, Universal Robina down
2.3%, and Ayala Land down 2.3%.
   Asia stock indexes and currencies at 0345 GMT                                  
    Japan                   -0.01        -6.74                  -1.31           5.33
    China                   -0.38        +1.67                   0.17           1.48
    India                    0.00        -0.35                   0.00          12.77
  Indonesia                 -0.45        -1.82                   0.02           1.69
  Malaysia                  -0.34        -2.66                  -0.44          -3.43
 Philippines                -0.37        -0.85                  -1.35          -3.65
   S.Korea                  -1.12        -3.86                  -0.53          13.50
  Singapore                 +0.01        -1.12                   0.19          10.61
   Taiwan                   -0.16        +2.70                  -0.19          17.25
  Thailand                  -0.45        -4.28                   0.17          12.30

 (Reporting by Shashwat Awasthi in Bengaluru; Editing by Kim