EMERGING MARKETS-Indian bond yields rise, rupee strengthens as keeps rates steady

    * India's Nifty 50 index heads for best week since April
    * Indonesia's Q4 GDP shrinks more than expected
    * Thailand, Philippines and S. Korea gain ~1% each

    By Shruti Sonal
    Feb 5 (Reuters) - Indian bond yields rose and the rupee
strengthened on Friday, after the central bank kept interest
rates unchanged at record low levels and said it would maintain
support for the economy's recovery from the COVID-19 pandemic.
    Reserve Bank of India (RBI) governor Shaktikanta Das said
the Indian economy is poised to move upwards and that inflation
was expected to remain within its targeted range over the next
few quarters.
    "We're looking at a very sharp bounce back in growth", said
Sameer Narang, chief economist at Bank of Baroda. 
    "The central bank's monetary and fiscal policy are going
hand in hand, and that's an important takeaway". 
     The Indian rupee strengthened to 72.94 against the
dollar, while the 10-year bond yield rose to
6.18%, its highest since August.
    The upward trend in the bond yields is likely to continue
due to the RBI's strategy of keeping an elevated borrowing
program to support economic growth next year, Narang added.
    Indian shares, which have gained nearly 10% during
the week in a budget-fuelled rally, retreated from their record
highs but were set to post their best week since April.
    In Indonesia, shares erased some early gains after
data showed the economy shrank slightly more than expected in
the fourth quarter, leading to its first full-year contraction
in over two decades. 
    The Jakarta benchmark, which had added as much as
0.7% in early trade, pared some gains to trade up 0.3% by 0638
    "Worryingly, the outlook for 2021 remains uncertain as the
country continues to battle an intensifying COVID-19 outbreak",
Mizuho Bank analysts said in a note.  
    "Beyond Q1, improvement in growth will be uneven, possibly
interrupted, depending on the vaccine-pandemic evolution
determining outbreak severity."
    Thailand, Philippine and South Korean
benchmarks gained 1%, in line with gains in the broader markets,
as progress in vaccine distribution led to hopes for further
normalisation in the global economic recovery.
    In the Philippines, annual inflation accelerated faster than
expected to hit the highest level in two years in January,
limiting the central bank's room for further interest rate cuts
at its meeting next week.
    Most currencies in the region weakened as the dollar headed
for its best weekly gain in three months, supported by growing
confidence that the U.S. economic recovery will outpace global
    The Indonesian rupiah, Malaysian ringgit,
Singapore dollar and the Thai baht fell between
0.1% and 0.4%.
    ** Thai Bev to sell 20% of beer business in blockbuster
Singapore IPO
    ** Indonesian 10-year benchmark yields are down 3.50 basis
points at 6.165%
    ** Top gainers on the Thailand's SETI include TWZ
Corporation PCL, Pan Asia Footwear PCL, R&B
Food Supply PCL
  Asia stock indexes and                                 
 currencies at   0712 GMT                          
                     DAILY       %          DAILY   YTD %
                         %                      %  
 Japan               +0.04   -2.14  <.N22   1.54    4.86
 China    <CNY=CFX   -0.02   +0.85  <.SSE   -0.15    0.67
          S>                        C>             
 India               +0.05   +0.21  <.NSE    0.40    6.96
 Indones             -0.07   +0.14  <.JKS    0.48    2.63
 ia                                 E>             
 Malaysi             -0.34   -1.25  <.KLS   -0.39   -2.98
 a                                  E>             
 Philipp             -0.02   -0.12  <.PSI    1.67   -1.69
 ines                               >              
 S.Korea  <KRW=KFT   -0.46   -3.34  <.KS1    1.07    8.60
          C>                        1>             
 Singapo             -0.07   -1.26  <.STI    0.06    2.24
 re                                 >              
 Taiwan              +1.47   +1.83  <.TWI    0.61    7.26
 Thailan             -0.20   -0.47  <.SET    0.96    3.30
 d                                  I>             

 (Reporting by Shruti Sonal in Bengaluru; Editing by Amy Caren