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EM ASIA FX-Most Asian currencies firmer as U.S.-Iran tensions abate

* Safe-haven bets unwound * Oil prices below pre-Soleimani killing levels * Focus turns to U.S.-China trade deal (Adds text, updates prices) By Nikhil Nainan Jan 9 (Reuters) - Most Asian currencies rallied on Thursday on signs that the United States and Iran were backing down from further military conflict, encouraging investors to ditch safe-haven assets and return to riskier bets. Tempering concerns of a further retaliation against Iran, after it struck military bases housing U.S.-led troops in Iraq, U.S. President Donald Trump said his country did not necessarily have to hit back. The easing in tensions dealt a blow to the near week-long rally in assets like gold and the Japanese yen, considered safe-havens in times of heightened uncertainty. "The surprising lack of retaliation post the weekend threats from the President were evidently taken well by the market, returning investors to the positive conditions prior to the breakout of this issue," Jingyi Pan, a market strategist with IG in Singapore wrote in a note. South Korea's won advanced 1% against the dollar, the most among regional peers, as investors now shift focus back to expectations around the signing of the Phase 1 U.S.- China trade deal next week that could support the stuttering global economy, especially those heavily reliant on trade. However, risks still remain given that many key issues between the top two global economies are yet to be hammered out. Oil prices have also fallen below the level it was at before the Jan. 3 killing of Iranian military commander Qassem Soleimani that sparked the stand-off. Oil importers such as India and Indonesia saw their currencies also gain, with the rupee and rupiah strengthening 0.4% and 0.3%, respectively. The Indonesian unit climbed to its highest level since June 2018. "The fact is that while there evidently remains risks that Iran may have further scores to settle, the likelihood of this playing out in an all-out war and posing a threat to oil supply in the Middle East had significantly diminished," Pan added. The yuan also scaled an over five-month peak against the greenback, strengthening 0.2% to 6.93. Meanwhile, the only currency failing to mark gains on the improved risk-appetite was the Philippine peso, which weakened slightly to 50.595. CURRENCIES VS U.S. DOLLAR Change on the day at 0614 GMT Currency Latest bid Previous day Pct Move Japan yen 109.280 109.12 -0.15 Sing dlr 1.350 1.3506 +0.04 Taiwan dlr 29.973 30.087 +0.38 Korean won 1158.900 1170.8 +1.03 Baht 30.285 30.35 +0.21 Peso 50.595 50.57 -0.05 Rupiah 13847.000 13885 +0.27 Rupee 71.405 71.69 +0.40 Ringgit 4.087 4.1 +0.32 Yuan 6.930 6.9456 +0.23 Change so far in 2020 Currency Latest bid End 2019 Pct Move Japan yen 109.280 108.61 -0.61 Sing dlr 1.350 1.3444 -0.42 Taiwan dlr 29.973 30.106 +0.44 Korean won 1158.900 1156.40 -0.22 Baht 30.285 29.91 -1.24 Peso 50.595 50.65 +0.11 Rupiah 13847.000 13880 +0.24 Rupee 71.405 71.38 -0.04 Ringgit 4.087 4.0890 +0.05 Yuan 6.930 6.9632 +0.48 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Rashmi Aich)