EM ASIA FX-Most Asian units soften before Fed meet, Taiwan dollar firms

* Taiwan dollar among best performers for week, at 3-week

high

* Uncertainty remains on Fed's 2018 path - strategist

* Indonesian rupiah seen as possible underperformer

(Adds text, updates prices)

By Ambar Warrick

March 16 (Reuters) - Most emerging Asian currencies on

Friday slipped against the dollar, which firmed overnight, as

many investors refrained from taking positions ahead of a

Federal Reserve meeting next week that will set the tone for

U.S. fiscal policy in 2018.

The dollar's advance was largely capped by jittery market

participants following a turbulent week of trade tensions and

shake-ups in the U.S. government.

Ahead of the Fed meeting, "we expect the USD to remain

supported. While a rate hike has been priced in for the upcoming

meeting, much uncertainty remains on whether the dots plot will

be changed," said Christopher Wong, a Singapore-based FX

strategist with Maybank.

However, the dollar softened against the yen after

the Washington Post reported that President Donald Trump had

decided to remove H.R. McMaster as his national security

adviser.

Among emerging Asian units, the South Korean won

led declines, falling about 0.3 percent. However, the currency

was still on track to end the week higher, as investors remained

positive about easing political tensions in the Korean

Peninsula.

The Chinese yuan fell against the dollar after

there was a weaker midpoint fixing. While the yuan has firmed

recently on the general dollar weakness - and was on track for a

small gain this week - it has come under pressure following

scrutiny of China's trade practices by the United States.

The head of the influential U.S. Chamber of Commerce warned

the Trump administration that unilateral tariffs on Chinese

goods could lead to a destructive trade war.

This followed a Reuters report that Trump was considering

tariffs on up to $60 billion worth of select Chinese imports.

INDONESIAN RUPIAH

The Indonesian rupiah fell slightly against the

dollar, but was on track to end the week slightly higher.

The rupiah is among the few currencies to weaken against the

dollar this year. It has been dented by recent trade deficits.

"As fiscal deficit also faces increasing pressure amid

higher electricity and fuel subsidies, the danger of twin

deficits could keep investors at bay," Mizuho said in a note.

"Volatility around the rupiah is likely to remain in place

and as a result, it could underperform compared to other

regional currencies," it said.

TAIWAN DOLLAR

The Taiwan dollar was the biggest gainer on Friday,

rising about 0.1 percent to a more than 3-week high against the

dollar.

Central bank governor Yang Chin-long said the bank would

take a "flexible approach to manage floating exchange rate"

ahead of its rate- setting meeting on March 22.

Wong of Maybank added that the Taiwan dollar's recent

strength might have been spurred by the governor's comments. He

said that the currency's lower real effective exchange rate

implies it is not overvalued compared with peers.

The Taiwan dollar was on track for its best week since late

January.

The following table shows rates for Asian currencies against

the dollar on Friday.

CURRENCIES VS U.S. DOLLAR

Change on the day as at 0531 GMT

Currency Latest bid Previous day Pct Move

Japan yen 105.920 106.33 +0.39

Sing dlr 1.314 1.3132 -0.07

Taiwan dlr 29.169 29.200 +0.11

Korean won 1068.700 1065.4 -0.31

Baht 31.190 31.154 -0.12

Peso 52.020 52.03 +0.02

Rupiah 13760.000 13745 -0.11

Rupee 64.903 64.93 +0.04

Ringgit 3.921 3.918 -0.08

Yuan 6.328 6.3195 -0.13

Change so far in 2018

Currency Latest bid End 2017 Pct Move

Japan yen 105.920 112.67 +6.37

Sing dlr 1.314 1.3373 +1.77

Taiwan dlr 29.169 29.848 +2.33

Korean won 1068.700 1070.50 +0.17

Baht 31.190 32.58 +4.46

Peso 52.020 49.93 -4.02

Rupiah 13760.000 13565 -1.42

Rupee 64.903 63.87 -1.59

Ringgit 3.921 4.0440 +3.14

Yuan 6.328 6.5069 +2.84

(Reporting by Ambar Warrick in Bengaluru; Editing by Richard

Borsuk)