EMERGING MARKETS-South Korea's won, Thai baht leads Asia's FX higher as U.S. yields dip

    * RBI leaves rates unchanged at policy meeting as expected
    * S.Korea's won at strongest level since Feb-end

    By Nikhil Nainan
    BENGALURU, April 7 (Reuters) - The South Korean won and Thai
baht led Asia's emerging currencies higher on Wednesday as U.S.
bond yields continued to retreat, easing pressure on the
region's assets with stock markets edging ahead on global
economic recovery hopes. 
    The won advanced 0.3% to its strongest level
since late February as 10-year Treasury yields
extended their declines and put the dollar on the backfoot.
    The International Monetary Fund also raised its global
growth outlook to 6% this year, from 5.5%, pointing largely to
the U.S. recovery and unprecedented public spending.

    Those reflation hopes helped lift Philippine shares
and others in the region, though only just, ahead of minutes
from the Federal Reserve's March meeting, due later on
Wednesday, as well as regional developments like India's policy
    "We expect the broader thematic play of reflation, higher
commodity prices, vaccine trade and sharper global economic
rebound to play up again," Maybank analysts said. 
    Cautioning that they still do not expect the dollar to be in
free fall as U.S. yields remain elevated. "Fed officials need to
show some signs of anxiety before UST yield and dollar can ease
more meaningfully." 
    The Reserve Bank of India left rates unchanged, as widely
expected, but with daily COVID-19 cases surging and states
imposing restrictions, its commentary will be closely watched.
    "The RBI is expected to be on hold today. But this is a
forced, rather than desired hold," Mizuho Bank said in a client
   The sharp rise in COVID-19 infections "threatens to dim the
prospects of unfettered rebound in 2021" and "exacerbate the
unevenness of the recovery," it added.
    Stocks in Mumbai rose 0.4% ahead of the decision. 
    Investors have also been recalculating their expectations
for when the Fed will tighten policy, a shift from a month and
half of rising U.S. bond yields and a surging dollar spurred by
financial markets thinking the central bank will have to abandon
its pledge due to a fast-recovering economy. 
    The Fed has pledged not to raise interest rates until 2024,
while any indications of change could sap appetite for Asia's
higher-yielding currency and bond markets.
    South Korea, seen as a beneficiary from a global recovery
given its reliance on trade, reported its highest number of new
COVID-19 cases in three months, keeping a check on stock market
    Scotiabank says the broader market will play a more decisive
role for the won in April, where typically South Korean
companies pay dividends which tends to add upward pressure on
the dollar/won. The bank expects foreign investors to receive
$10.4 billion from the nation's top 16 companies.     
    ** Indonesian 10-year benchmark yields fell 12.1 basis
points to 6.548%
    ** Metro Pacific Investments Corp and First Gen
Corp led Philippine gains
    ** Spike in long-term Thai govt bonds had limited impact on
  Asia stock indexes and currencies at   0415 GMT
 COUNTRY      FX RIC      FX       FX     INDEX    STOCKS   STOCKS
                          DAILY %  YTD %           DAILY %  YTD %
 Japan                    +0.00    -5.92           0.34     8.57
 China                    -0.01    -0.20           -0.53    -0.25
 India                    +0.00    -0.50           0.44     5.48
 Indonesia                +0.00    -3.17           0.03     0.43
 Malaysia                 +0.10    -2.57           0.31     -2.66
 Philippines              +0.06    -1.09           0.44     -7.29
 S.Korea                  +0.31    -2.68           0.24     9.09
 Singapore                +0.03    -1.30           -0.06    12.72
 Taiwan                   +0.18    +0.17           0.20     13.85
 Thailand                 +0.19    -4.37           -0.73    8.19
 (Reporting by Nikhil Kurian Nainan and Sameer Maneka in
Bengaluru; Editing by Kim Coghill)