EMERGING MARKETS-Asian FX slip on Fed day, won bats off hawkish minutes

    * Rupiah falls for third straight day
    * Singapore stocks hit lowest since June 4
    * Graphic: World FX rates
    * Asian stock markets:

    By Shashwat Awasthi
    June 16 (Reuters) - Indonesia's rupiah led minor losses
amongst Asian currencies on Wednesday, as markets settled in to
await the outcome of the U.S. Federal Reserve's policy meeting
that could determine the interest rate path for central banks
across Asia.
    The rupiah weakened for the third straight session,
down 0.2% on the eve of the Indonesian central bank's policy
meeting, as the U.S. dollar index hovered near one-month highs.
    The firm dollar also kept the Philippine peso and the
Thai baht 0.1% lower, while the Singapore dollar
and Malaysian ringgit were flat.
    Given that developing countries benefit from a weaker dollar
and lower U.S. Treasury yields, investors are hoping for some 
clarity from the Fed in terms of its policy tightening path. A
hawkish message could well set off market volatility across
emerging markets.
    "Once the road-map of the Fed's exit becomes clearer, and
initial market repercussions have been digested, it will open
the door for policy adjustments across the region," said
Frederic Neumann, co-head of Asian economics research at HSBC.
    While Asian central banks have so far kept policy settings
loose, minutes of a May policy meeting by the Bank of Korea
released on Tuesday showed that a majority of its board favoured
reining back stimulus.
    Citi analysts said in a note they expected South Korea to
hike its 0.5% rate earlier than anticipated, starting from
October, noting that faster post-COVID-19 economic normalisation
this year "would generate stronger domestic demand and more
demand-side inflation".
    The won, however, didn't react much and Citi said
markets had now priced two rate hikes by end-March 2022. But
Seoul's KOSPI equity index hit a record high as
foreigners appeared to buy the economic recovery message and
were net buyers of shares.
    Indonesia and Taiwan are expected to leave rates unchanged
at record lows this week.
    Strategists at Singapore's DBS bank warned that any
steepening of the U.S. rates curve stemming from the Fed meeting
carried risks for Asian bonds, which have recently received
robust inflows.
    "Rates/bonds of countries that run current account deficits,
relatively more dependent on external funding, higher foreign
bond ownership and still reliant on central bank bond purchases
could see relatively more bear-steepening pressures," they said.
    Singapore's benchmark index gave up gains made in the
previous session and slid 0.7%.
    ** Indonesian 10-year benchmark yields are up
1.7 basis points at 6.435%.
    ** Top losers on the Singapore STI include Yangzijiang
Shipbuilding Holdings down 2.1%, Singapore Airlines
 down 2%, and Sembcorp Industries down 1.8%.
    ** Indonesia raised 10 trillion rupiah ($701.3 million) from
an Islamic bond auction on Tuesday.
   Asia stock indexes and currencies at 0708 GMT                                   
    Japan                    +0.08       -6.13                   -0.51           6.73
    China                    +0.11       +2.00                   -1.06           1.32
    India                    -0.05       -0.39                   -0.48          12.95
  Indonesia                  -0.18       -1.44                   0.00            1.84
  Malaysia                   +0.00       -2.31                   0.05           -2.77
 Philippines                 -0.06       -0.17                   -0.05          -2.33
   S.Korea                   -0.02       -2.77                   0.62           14.10
  Singapore                  +0.03       -0.42                   -0.67          10.89
   Taiwan                    -0.08       +2.93                   -0.37          17.48
  Thailand                   -0.10       -3.85                   0.49           12.48
($1 = 14,260.0000 rupiah)

 (Reporting by Shashwat Awasthi in Bengaluru; Editing by Sujata
Rao and Rashmi Aich)