EMERGING MARKETS-Asia FX give up BOJ-fuelled gains as recession worries creep back

(.) * BOJ widens bond yield band * Asia FX volatile * Singapore dollar reverses course to gain * Yen up as much as 3.1% * China leaves rates unchanged By Harshita Swaminathan Dec 20 (Reuters) - Most Asian currencies were weaker on Tuesday amid volatile trading, as recession fears turned investors away from riskier assets, despite brief spikes earlier in the day after the Bank of Japan's (BOJ) surprise move to widen the band around its bond yield. The Thai baht was last seen at 34.86 to the dollar, a 0.1% fall on the day but higher than levels seen before the BOJ move. Malaysia's ringgit was also 0.2% lower. The BOJ widened the band around its 10-year government bond yield, allowing long-term interest rates to rise more. It marked the first significant shift from the central bank's stance of keeping yields at near-zero to encourage growth and inflation. The move led to an immediate spike in the 10-year yield and the yen. "The BOJ decision... it's affected the Japanese yen, in the way that Japanese yen appreciated further and that's really helped Asian currencies," said Poon Panichpibool, a markets strategist at Krungthai Bank. The yen rose as much as 3.1% to a four-month high of 132.64 to the dollar, which put pressure on the U.S. dollar index. The index fell as much as 0.7% following the BOJ move, allowing Asian currencies to reverse course and move higher, before giving up those gains. The Singapore dollar strengthened as much as 0.4%, but pared gains, and was last seen about 0.2% higher. Indonesia's rupiah also rose 0.2%, but was last seen down 0.2%. Apart from the BOJ's surprise, markets continued to be concerned by an incoming recession in developed economies, keeping the selling pressure on Asian assets, Panichpibool added. China left its benchmark lending rate unchanged for the fourth straight month, but expectations of policy easing are growing as the government has promised support to help the economy recover from COVID-19's blows. "China’s policy changes point to better growth next year, after the COVID ‘exit wave’ peaks sometime in Q1... An earlier exit means growth could recover strongly as soon as late Q1 or Q2 2023," analysts at Goldman Sachs said. The yuan was broadly unchanged. However, the country reported five COVID-related deaths for Monday, up from two deaths a day earlier, as infection cases rise, leading to a sell-off in Chinese stocks. The main stock index was down 1.1%. Other stock markets were also broadly lower on recession worries, with markets in Thailand and Indonesia down 0.8% and 0.7% respectively. HIGHLIGHTS: ** Philippine central bank governor says inflation likely to peak in December ** Indonesian central bank expected to scale down rate hikes to 25 basis points on Dec. 22, Reuters poll shows Asia stock indexes and currencies at 0642 GMT COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCKS DAILY % DAILY YTD % % % Japan +2.84 -13.54 -2.46 -7.72 China -0.02 -8.99 -0.90 -15.40 India -0.08 -10.20 -1.11 4.97 Indonesia -0.16 -8.77 -0.65 2.35 Malaysia -0.23 -6.05 -0.38 -6.13 Philippines +0.09 -7.88 0.42 -9.57 S.Korea +1.03 -7.82 -0.80 -21.64 Singapore +0.18 -0.38 -0.16 4.09 Taiwan -0.10 -10.01 -1.82 -22.22 Thailand -0.09 -4.23 -0.76 -3.12 (Reporting by Harshita Swaminathan; Editing by Janane Venkatraman)