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EMERGING MARKETS-Asian currencies edge higher ahead of U.S. inflation data

    * U.S. inflation data expected later on Thursday, seen +0.4%
m/m
    * China, Indonesia stocks outperform with 0.8% rise

    June 10 (Reuters) - Asia's emerging market currencies edged
up on Thursday as investors awaited a key U.S. inflation report
later that could provide a clearer signal on when the Federal
Reserve may begin discussing tapering its monetary stimulus.
    The Taiwan dollar led gains with a 0.2% rise, while
a handful of others including the Indonesian rupiah, one
of emerging markets' highest-yielding currencies, gained around
0.1%. 
    Traders all week have adopted a cautious approach when
dealing with Asia's risk-sensitive currencies ahead of the
report later on Thursday given the pace of the U.S. economic
recovery and vaccination campaign, prompting some to question
whether the Fed should begin discussing early tapering as price
pressures emerge.
    Also overnight, U.S. 10-year Treasuries, which
have helped prop up the dollar in recent months, fell below
1.5%, and were trading at 1.4789% in Asia. A further drop below
1.47% could take yields to the lowest since March 4. 
    Asia's emerging stocks markets also largely rose on
Thursday, with Chinese and Indonesian equities
crossing 0.5%.
    "Looks like the market has made up its mind about the CPI
data release due out later today," said Alvin Tan, head of Asia
FX Strategy at RBC Capital Markets.
    With bond yields falling, analysts said markets may be
expecting the Fed to stick with its current line that price
pressures are transitory and monetary stimulus will stay in
place for some time yet. They also pointed to payrolls data last
week that showed hiring did not grow as fast as expected.
    Alongside the Fed policy meeting next week, the central
banks of Indonesia, Taiwan and Japan meet. The week after that
is the Philippines' turn. 
    "Today's CPI numbers could prove scorching," Eugene Leo, a
rates strategist at DBS said, pointing to expectations for a
0.4% month-on-month rise.
    "However, we do not think that this would be sufficient to
change the transitory price pressures narrative that the Fed has
painted."
    Helping to boost Indonesian shares were retail sales figures
that expanded for the first time in 17 months in April.
 
    The benchmark index is up about 2.6% so far this month,
while the rupiah has appreciated slightly and bond yields have
remained relatively stable. 
    In China, the central bank governor said he expects the
country's annual average inflation to be slower than 2% this
year. The bank is trying to cool credit growth to help contain
debt risks, but is treading carefully to avoid hurting economic
recovery.
    
    HIGHLIGHTS: 
    ** Indonesian 10-year benchmark yields fell 9.2 basis points
to 6.345%​​
    ** In Indonesia, PT Arthavest Tbk and PT Ateliers
Mecaniques D'Indonesie Tbk led gains with a 25% rise
each
    ** As Fed taper looms, global central banks eye their own
exits from stimulus 
      
  Asia stock indexes and currencies at 0349 GMT
 COUNTRY      FX RIC      FX       FX     INDEX    STOCKS   STOCKS
                          DAILY %  YTD %           DAILY %  YTD %
 Japan                    +0.06    -5.75           0.42     5.61
 China                    +0.02    +2.24           0.82     4.25
 India                    +0.00    +0.12           0.00     11.83
 Indonesia                +0.11    -1.37           0.84     1.99
 Malaysia                 +0.04    -2.30           0.11     -2.71
 Philippines              +0.03    +0.80           -0.01    -3.33
 S.Korea                  +0.11    -2.51           0.42     12.39
 Singapore                +0.02    -0.21           0.51     11.45
 Taiwan                   +0.23    +2.82           0.40     15.62
 Thailand                 +0.10    -3.73           0.43     12.69
 
 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by
Christopher Cushing)
  
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