EMERGING MARKETS-Asian currencies checked by lower yuan after PBOC move, stocks up on stimulus hopes

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3lKhL5I * Yuan falls after PBOC removes reserves for forward trading * Rising COVID-19 cases weigh on Malaysian stocks * Indonesian stocks gain on easing of coronavirus curbs By Shriya Ramakrishnan Oct 12 (Reuters) - Most Asian currencies struggled for traction on Monday as China's yuan pulled back from a 17-month high after a policy tweak by the central bank, while stock markets rose on hopes for a new U.S. stimulus package. Over the weekend, the People's Bank of China (PBOC) lowered the reserve requirement ratio for financial institutions when conducting some foreign exchange forwards trading to zero from 20%, effectively lowering the cost of shorting the Chinese currency. The PBOC move reflects "the Chinese authorities' concerns with the raging yuan strength," said Jingyi Pan, market strategist at trading firm IG Asia. "That said, this had not been viewed as a significant curb or attempt to reverse the current stronger yuan trend that remains supported by fundamentals," Pan added. The Singapore dollar, Malaysian ringgit and Thai baht hovered near unchanged levels to lower during the day, while the Taiwan dollar once again stood out with gains of more than 1%. The South Korean won advanced 0.4% in tandem with gains in the stock market after data showed overseas sales of semiconductors, the nation's top export item, jumped 11.2% for the first 10 days of October. Stock markets in the region were broadly higher, even as negotiations on U.S. fiscal stimulus ran into resistance, with the Democrats dismissing the Trump administration's proposal to pass a stripped-down coronavirus relief bill as inadequate. "The fact of the matter remains one where the market continues to judge the passage for the phase four stimulus to be expected down the road, even if politics does get in the way for the time being," IG's Pan said. Indonesian stocks climbed as much as 1% to their highest level in nearly a month, as Jakarta Governor Anies Baswedan announced the capital city will kick off a two-week 'transitional' period of eased coronavirus curbs. Markets barely reacted to protests over a controversial jobs law that could cut red tape and boost investment for Indonesia's coronavirus-hit economy. Protesters say the law undermines labour rights and weakens environmental protections. "Although the new labour laws could depress economic performance in the short term, in the medium to longer run it will indeed jack up investments and bolster economic growth," said Anthony Kevin, macro economist at Mirae Asset Sekuritas Indonesia. Malaysian stocks were down more than 1%, hurt by concerns over a sharp spike in coronavirus infections over the past few weeks. HIGHLIGHTS: ** Indonesian 10-year benchmark yields are down 1 basis point at 6.889% ** Top losers on FTSE Bursa Malaysia Kl Index include PETRONAS Chemicals Group Bhd down 1.66% at 5.92 ringgit; CIMB Group Holdings Bhd down 1.58% at 3.11 ringgit ** Top gainers on the Singapore STI include Comfortdelgro Corporation Ltd up 1.38% at S$1.47, Keppel Corporation Ltd up 1.34% at S$4.55 Asia stock indexes and currencies at 0407 GMT COUNTRY FX RIC FX FX INDEX STOCK STOCKS DAILY YTD % S YTD % % DAILY % Japan +0.11 +2.98 -0.32 -0.48 China -0.40 +3.61 2.27 9.71 India 0.00 -2.39 0.71 -1.39 Indonesi -0.10 -5.51 0.81 -19.13 a Malaysia -0.02 -1.14 -0.91 -4.55 Philippi -0.02 +4.74 -0.28 -24.32 nes S.Korea +0.40 +0.67 0.47 9.35 Singapor -0.12 -0.73 0.64 -20.90 e Taiwan +1.15 +5.13 0.29 7.73 Thailand -0.06 -3.73 0.45 -19.43 (Reporting by Shriya Ramakrishnan in Bengaluru Editing by Shri Navaratnam)