* EM currencies steady after broad-based rout this week
* EM local currency yields at ease off 2018 highs
* Stocks head for third weekly fall of the month
* EM stocks performance in 2018 tmsnrt.rs/2dNvkjl
* World FX rates in 2018 tmsnrt.rs/2egbfVh
By Marc Jones
LONDON, April 27 (Reuters) - South Korea's won led a rebound in emerging market currencies on Friday, as comments from North Korea's Kim Jong Un of a "new history" between the two sides helped end a brutal week for EM FX on a positive note.
The won rose as much as 0.6 percent against the dollar after North Korean leader Kim and South Korean President Moon Jae-in met in the first summit for the two countries in over a decade.
There was relief too at a drop back in U.S. bond yields and the dollar as they drive borrowing costs in poorer countries that sell their debt in the U.S. currency.
Russia was also in focus as its central bank prepared for its first formal meeting since Washington's sanctions on aluminium giant Rusal sent the rouble tumbling more than 8 percent.
This week's bond market and dollar stresses have fuelled a much broader EM sell-off though, battering many heavyweights.
South Africa's rand has slumped 2.6 percent, the Brazilian real, Argentinian peso and rouble are all down roughly 2 percent, while Mexico's peso has lost 1.5 percent.
It has brutal in Asia too where the Thai baht has had its biggest weakly fall since November 2016 and India and Indonesia's rupee and rupiah have dropped to one- and two-year lows respectively.
"This is what usually happens when you have a sharp Treasury (U.S. government bond) sell-off and a rise in the dollar," said Allianz Global Investors' EM portfolio manager Naveen Kunam.
"It is not that significant a sell-off (in terms of size), but it is the pace of the move that is."
Emerging economy stock and bonds have also been swept lower. MSCI's 24-country pan-EM index saw a 0.6 percent bounce on Friday but was on track for its third weekly fall of the month.
It has been coupled with a sharp rise in EM local-currency government bond yields. They have spiked to their highest level of the year and left many of big 'buy EM' trades championed in January in the red.
"The pain trade would be a stronger dollar," said fund manager BlueBay's David Riley. "A meaningful and sustained move higher in the dollar would be a challenge not only for EM assets but for risk assets generally."
The countries that have been spared the worst of the damage have included Turkey, which hiked its interest rates this week after a slump in the lira ramped up inflation.
Russia's central bank is likely to keep its key rate unchanged at 7.25 percent later according to a Reuters poll, postponing a planned rate cut following the sanctions strains.
Indonesia's central bank Governor Agus Martowardojo had said on Thursday too that he would be prepared to raise rates if weakness in the rupiah threatened its inflation target or the stability of the financial system.
Argentina meanwhile has been forced to deploy its biggest FX interventions in at least 15 years. However, its peso was down another 1.5 percent on Friday.
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