EMERGING MARKETS-Asian currencies gain on China data, Fed policy support

    * Graphic: World FX rates
    * Graphic: Foreign flows into Asian stocks
    * Taiwan dollar heads for best day in more than four months
    * Jakarta shares subdued as mutated virus strain found

    By Shashwat Awasthi
    August 31 (Reuters) - Emerging Asian currencies rose on Monday as quickening growth in
China's services sector supported recovery prospects in the region and added to positive
sentiment around the U.S. Federal Reserve's accommodative stance last week.
    Taiwan's dollar was set for its best day since March 20 while the Thai baht
 and Indonesia's rupiah also firmed by 0420 GMT, with investors taking a liking
to the Fed's new strategy favouring higher inflation and growth.
    The historic shift in the U.S. central bank's stance is being interpreted as signalling
lower interest rates over a long period of time - a view held by Mizuho analysts, who say this
may correspond to a softer greenback.
    "A weaker USD and asset market boost from 'lower for longer rates' are likely to be positive
for EM Asia FX and assets," they said, but warned that any sustained steepening of the U.S.
Treasury yield curve could be a significant headwind.
    With little domestic news to drive moves, the market focused on China's service sector
activity which expanded at a much faster pace in August although factory growth was slower due
to floods.
    Thai shares and trade-reliant Singapore stocks added 0.4% and 0.3%,
    Stocks in Indonesia eased as much as 0.2% before trading flat, as a more infectious
mutation of the new coronavirus was found in the country and daily new infections remained above
the past month's daily average.
    With markets in Malaysia and the Philippines shut for a holiday, dealers looked ahead to
speeches this week from Federal Reserve Vice Chairman Richard Clarida and others before making
further bets.
    "It is likely that investors will still be looking for more colour on the implementation and
timing of forward guidance," Morgan Stanley analysts said of the upcoming addresses.
    "Unless these upcoming speeches provide significant incremental colour versus what was
already revealed during the Jackson Hole symposium, we would not expect them to have a
meaningful impact on emerging market currencies."
    ** Thailand's 10-year government bond yields are down 3 basis points at 1.43%
    ** Top gainers on Thailand's SETI include Max Metal Corporation up 100%,
Luxury Real Estate Investment Fund up 12% and Ingress Industrial Thailand
up 11.4%
    ** Top gainers on the Singapore STI include Capitaland Mall Trust up 2.6%,
SATS Ltd up 1.7% and DBS Group up 1.3%
   Asia stock indexes and currencies at 0422 GMT                                    
     Japan                     -0.23       +2.87                   1.74           -1.59
     China                     +0.23       +1.67                   0.80           12.48
     India                     +0.00       -2.73                   1.08           -3.24
   Indonesia                   +0.50       -4.56                  -0.11          -15.22
   Malaysia                     0.00       -1.78                   0.00           -4.00
  Philippines                   0.00       +4.67                   0.00          -24.71
    S.Korea                    +0.12       -2.24                  -0.46           6.62
   Singapore                   -0.06       -1.05                   0.36          -20.91
    Taiwan                     -0.07       +1.91                  -0.55           5.52
   Thailand                    +0.39       -3.61                   0.37          -15.92
 (Reporting by Shashwat Awasthi in Bengaluru; Editing by Jacqueline Wong)