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EMERGING MARKETS-Asian currencies muted as markets tread water ahead of Fed meeting

    * Graphic: World FX rates tmsnrt.rs/2egbfVh
    * Graphic: Foreign flows into Asian stocks tmsnrt.rs/3lKhL5I
    * All eyes on Fed policy
    * Indonesian stocks fall further ahead of BI meeting
    * Manila stocks slip after three days of gains

    By Shashwat Awasthi
    Sept 16 (Reuters) - Most emerging Asian currencies inched higher on Wednesday but moves were
limited as investors looked to the U.S. Federal Reserve meeting for signs on how it will execute
a policy shift allowing for greater tolerance towards inflation.
    The Taiwanese dollar stood out with a 0.7% rise but most others saw muted action,
with the Singapore dollar, Philippine peso and the Thai baht all
marginally firmer against the U.S. dollar, which has seen four months of weakness.
    While the chances of the U.S. central bank delivering actual new policy steps on Wednesday
are seen as minimal, analysts expect at the very least the Fed's newest economic projections to
point to an extended period of lower interest rates. 
    "While these (messages) are all expected to keep the greenback subdued, there are plenty of
items on the table the market could pick up on," said Jingyi Pan, a strategist with retail
trading platform IG. "Any lack of dovish guidance is not expected to be taken well by the
market."
    Indonesia's rupiah, which has weakened 2% so far this month, firmed for the second
straight session ahead of Bank Indonesia's monetary policy meeting on Thursday, where the
central bank is expected to hold off cutting interest rates further to avoid placing any
additional pressure on the local currency.
    Jakarta stocks meanwhile slid for the second consecutive day, giving up more of the
5% gains made since late last week. 
    Bank Indonesia (BI) has been in focus among foreign investors as the government considers
increasing its involvement in the country's monetary policy framework. The central bank has
intervened to support the rupiah as concerns about central bank independence weighed on a
currency already under pressure from an economy sliding into recession.

    Indonesia's finance minister on Tuesday forecast a steeper-than-expected contraction in
Southeast Asia's largest economy in the third quarter, after coronavirus curbs were reinstated
in the capital of the country with the highest COVID-19 death toll in the region. 
    Maybank analysts said in a note that BI would likely continue to intervene to stabilise the
rupiah if needed, limiting any weakness in the currency.
    Philippine stocks, which have shed nearly a quarter of their value this year as the
pandemic hammered the economy, slipped 0.8%.    
    The Philippines' rising COVID-19 death toll has raised doubts about the government's recent
decision to significantly relax social distancing norms.
    Malaysia's markets were closed for a holiday.
    
    HIGHLIGHTS
    
    ** Indonesian 10-year benchmark yields are up 3.2 basis points at 6.945%
    ** Top losers on the Jakarta stock index include Inter Delta down 6.88%, Trisula
International down 6.86% and Pollux Investasi Internasional down 6.73%
    ** In the Philippines, top index losers are SM Investments down 2.56%, Megaworld
 down 2.19% and Universal Robina down 1.98%
    
    
   Asia stock indexes and currencies at 0351 GMT                                   
   COUNTRY      FX RIC    FX DAILY %    FX YTD %     INDEX   STOCKS DAILY %  STOCKS YTD %
    Japan                    +0.15        +3.17                   0.21          -0.64
    China                    +0.13        +2.81                  -0.24           7.80
    India                    0.00         -3.08                   0.00          -5.31
  Indonesia                  +0.30        -6.15                  -0.83          -19.70
  Malaysia                   0.00         -0.94                   0.00          -3.62
 Philippines                 +0.06        +4.75                  -0.89          -23.68
   S.Korea                   +0.25        -1.68                   0.09          11.29
  Singapore                  +0.10        -1.13                   0.43          -22.54
   Taiwan                    +0.70        +3.19                   1.24           8.40
  Thailand                   +0.03        -4.04                   0.01          -18.58
 
 (Reporting by Shashwat Awasthi in Bengaluru; Editing by Patrick Graham and Ana Nicolaci da
Costa)
  
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