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EM ASIA FX-Asian currencies tentative as trade worries linger

* S.Korean won suffers sharp fall after c.bank meet, but

regains

some losses

* Sino-U.S. trade tension's keep investors on edge

* Indian rupee gains ahead of key data

(Adds text, updates prices)

By Nikhil Nainan

July 12 (Reuters) - Asian currencies were treading water on

Thursday, as a cautious backdrop left investors uncertain about

their bets a day after the latest U.S. trade tariff threat had

spread fresh tumult in financial markets.

The dollar index against a basket of six major currencies

was steady as U.S. inflation data reaffirmed expectations

that the Federal Reserve will hike rates two more times this

year.

Although Chinese equities clawed back Wednesday's heavy

losses, the onshore yuan breached the key 6.7 level

against the dollar after the People's Bank of China (PBOC) set

the weakest fixing in nearly a year in the wake of the fresh

U.S. tariff salvo.

The yuan was 0.2 percent weaker at 6.690.

"It seems that the CNY has actually strengthened against the

China Foreign Exchange Trade System (CFETS) basket today.

Markets are taking this as a sign that the PBoC is keen to

anchor RMB sentiment rather than pursue depreciation," said Wei

Liang Chang, a FX strategist at Mizuho Bank.

However, "trade concerns are not likely to subside without

progress in negotiations, but at least any fears of a RMB-led

spillover into Asian FX have subsided."

The Indian rupee gained 0.2 percent to 68.645 per

dollar, ahead of key inflation and trade data expected later in

the day.

A Reuters poll predicted Indian inflation to have risen to a

near two-year high in June, driven by surging oil and food

prices - a development that would strengthen calls for more

monetary tightening by the Reserve Bank of India.

The Thai baht recovered and inched higher after the

Thai central bank chief said it had intervened to sooth rapid

moves in the local unit.

The currency declined as much as 0.2 percent to its weakest

level since October 2017 earlier in the session.

WON SLIDES AFTER BOK MEETING

South Korea's won slid 0.9 percent to 1130.2 per

dollar at one point, after the country's central bank kept rates

unchanged, as expected, but Governor Lee Ju-yeol signalled risks

to the economy from U.S.-driven trade tensions.

"The won I think was impacted somewhat from a more dovish

than expected tone from the BoK, with Governor Lee highlighting

concerns over trade disputes alongside potential downside risks

to growth," Mizuho's Wei Liang Chang said.

But the currency managed to recover some lost ground to

fetch 1,126.0 to the dollar, as a dissenting vote on the

seven-member board appeared to raise the chance of a rate hike

in the coming months.

The Bank of Korea downgraded its growth outlook to 2.9

percent this year from 3 percent previously. The won had fallen

to its weakest level since end-October last week.

CURRENCIES VS U.S. DOLLAR

Change on the day at 0543 GMT

Currency Latest bid Previous day Pct Move

Japan yen 112.260 112 -0.23

Sing dlr 1.362 1.3639 +0.12

Taiwan dlr 30.524 30.481 -0.14

Korean won 1126.000 1120 -0.53

Baht 33.270 33.29 +0.06

Peso 53.477 53.611 +0.25

Rupiah 14405.000 14380 -0.17

Rupee 68.645 68.77 +0.18

Ringgit 4.039 4.037 -0.05

Yuan 6.690 6.6750 -0.23

Change so far in 2018

Currency Latest bid End 2017 Pct Move

Japan yen 112.260 112.67 +0.37

Sing dlr 1.362 1.3373 -1.84

Taiwan dlr 30.524 29.848 -2.21

Korean won 1126.000 1070.50 -4.93

Baht 33.270 32.58 -2.07

Peso 53.477 49.977 -6.54

Rupiah 14405.000 13565 -5.83

Rupee 68.645 63.87 -6.96

Ringgit 4.039 4.0440 +0.12

Yuan 6.690 6.5069 -2.74

(Reporting by Nikhil Kurian Nainan in Bengaluru

Editing by Shri Navaratnam)